Competitive Bidding
Almost everyone in health policy—ranging from socialist single-payer advocates to libertarians at the CATO Institute—agrees on two things: (a) Medicare could save a lot of money by using buying oxygen supplies, electronic wheelchairs, diabetes test strips, and the like from the cheapest suppliers, and (b) a Medicare fee schedule creates perfect opportunities for special interest groups to leverage their political influence to restrain competition and raise prices. As one examines the scary budget projections over the coming decades, it’s especially important to impose greater price discipline to put Medicare on a sustainable fiscal path.
Medicare officials and fiscal conservatives in Congress have sought to address equipment pricing by replacing the fee schedule with competitive bidding. This is possibly the most bipartisan, belt-tightening deregulation measure in all of health policy. The Obama administration conducted an apparently-successful experiment in which Medicare officials invited bids and awarded contracts to 356 suppliers of medical equipment in nine metropolitan areas. The program has saved an estimated $202 million.
See full Harold Pollock post at The Incidental Economist.
This is a no brainer.
This has become a big deal over at the Incidental Economist.
Competitive bidding makes complete sense.
Competitive bidding and selective contracting are both great ideas Medicare should pursue.
“Medicare could save a lot of money by using buying oxygen supplies, electronic wheelchairs, diabetes test strips, and the like from the cheapest suppliers”
———————-
Does China produce any of the above items?
If so, China could save Medicare.
The mark of a truely successful money-saving idea in Medicare is whether or not special interests descend on Washington lobbying for repeal of the program.
Anyone else ever worked for government and had experience with the minimum bid sticky notes that needed tape to keep them stuck to the wall?
In the private sector, bids are usually entertained from the least expensive qualified suppliers. In government, not necessarily.
Unless, of course, one gives the money to the people actually using the supplies. They are perhaps the most qualified to make quality/price tradeoffs that make sense.