Oops. Competition Works Here, Too
Historically, the government has effectively set prices through Medicare for wheelchairs, hospital beds and other medical equipment. But a demonstration project begun in 2011 introduced competitive bidding in roughly 100 metropolitan areas to see if market forces could bring down prices. The results have been dramatic. Prices for oxygen equipment went down 41 percent; wheelchairs, 36 percent; hospital beds, 44 percent; and the cost of diabetic testing equipment, like glucose strips, dropped by a whopping 72 percent. And research has shown no adverse effects on beneficiaries.
Big surprise! Economics 101 right here!
Of course, the demonstration will not be rolled out nationwide because all the durable medical equipment (DME) vendors will all complain to their Congressman. Members of Congress will then step in and block the program because, by golly, their constituents in the DME industry deserve the right to defraud Medicare and loot the Treasury. After all, that’s the American way in our health care system!
This also makes me happy.
After these two posts, I am encouraged. There is a light at the end of the tunnel – market forces DO work! I just hope that we roll out these revisions to the rest of the healthcare industry before that light at the end of the tunnel turns into a subway train.