Competitive Bidding: Better for Medicare or Patients?

Posted on April 19 2012

For the past year Medicare has been experimenting with a competitive bidding system in an effort to combat fraud and reduce waste. Currently in use in nine metropolitan areas of the country, nine categories of medical supplies are included in the program – oxygen supplies, standard and complex power wheelchairs, mail-order diabetic supplies, tube-feeding supplies and equipment, sleep apnea machines and equipment, hospital beds, walkers and certain types of mattresses. Medicare boasts that through its experimental use of the program, it has saved nearly $200 million and plans to expand it to more areas of the country over the next year.

According to the Washington Post, Medicare’s evaluation of this system found that not only did they receive a minimal number of complaints from beneficiaries, but also there was no impact on beneficiaries’ health status. However, home care supply organizations argue that Medicare’s competitive bidding system is flawed. These institutions are concerned that with this system in place, patients will receive sub-par equipment and there will be shortages in medical supplies due to the limited number of approved suppliers. There is also widespread concern that smaller, local medical suppliers will go out of business.

Only time will tell how this system will work out for patients and small businesses across the country. Since Medicare’s report found little to no negatives in their competitive bidding system, plans to expand the program to 100 metropolitan areas next year are moving forward.


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