• More competitive bidding in Medicare?

    Austin is on vacation, but I feel compelled to give him a victory lap nonetheless:

    The Obama administration said Wednesday that it would vastly expand the use of competitive bidding to buy medical equipment for Medicare beneficiaries after a one-year experiment saved money for taxpayers and patients without harming the quality of care.

    The experiment represented a sharp break from the usual fee-for-service Medicare program, under which beneficiaries can choose any supplier or provider of goods and services. In the experiment, Medicare officials invited bids and awarded contracts to 356 suppliers of medical equipment in nine metropolitan areas, including Cleveland, Dallas, Miami-Fort Lauderdale and Riverside, Calif.

    Kathleen Sebelius, the secretary of health and human services, said the pilot program had reduced Medicare costs by 42 percent, or $202 million, by securing lower prices and curbing “inappropriate utilization” of personal medical equipment in the nine markets.

    Granted, I’m biased. But few have been beating the drums for the potential of competitive bidding like this blog has.

    UPDATE: Merrill Goozner had the goods a month ago.


    • I think they’ve tried to implement this in the past with wheelchairs and such but the industry paid $ to our congress-critters to ban the practice and preserve their profits.
      Of course it saves money… but… It will be interesting to see how far this gets before it runs into a firestorm of opposition from the DME industry.

    • You realize this violates Republican dogma that says government cannot use its purchasing power to get lower prices don’t you.

      Remember, thanks to Republicans Medicare cannot use its purchasing power to get lower prescription drug prices. Just wait until Republicans find out about this program, it will called a violation of free enterprise and be killed ASAP.

      • david R.

        but according to the final few paragraphs of the New York Times article linked to in this post, the DME-competitive-bidding program is a result of the Medicare update act passed by a Republican controlled Congress in 2003 (same bill that led to Medicare Part D). Then, according to the Times, the 2008 Congress controlled by the Democrats legislated against the program. It would be interesting to hear the entire story if any readers of this blog know it.

    • People for Quality Care (www.peopleforqualitycare.org) is an advocacy organization that talks to Medicare beneficiaries and providers across the country every day and we hear the damage competitive bidding has done.

      Measuring its success or failure is something we won’t be able to do for a while. Many of the people needing and using these medical supplies might not even be aware of the program, nor had an interaction where it has affected them…yet. We conducted two polls and 84 percent of beneficiaries in both polls (in competitive biddings areas) were unaware of the program after 6 months. We assume it’s because of lack of education by Medicare and the fact that it might take more than 6 months for someone to need a supply.
      We will really see the damage over a year or two as competitive bidding reaches more areas and more HME dealers are forced to close their doors. Patients and caregivers are going to be surprised and upset when the people they have come to trust can no longer help them and they are forced to go points unknown to get what they need to live and remain healthy.

      We know Medicare fraud is a problem, we get that. But, taking an economic baseball bat to the smaller (and honest) HME dealers will not solve the problem, it will make it worse. Remember prohibition? What did that do? It made criminals rich and increased their illegal activities. It brought more alcohol in right under the government’s nose. Fight the real fraud, punish the guilty; the beneficiaries and good HME dealers will thank you! Let the good HME dealers do what they do best: care for their patients.