Medicare Savings vs. the Lobbyists
The New York Times, June 25, 2008
To cut costs and reduce fraud in one corner of the sprawling
Medicare program, Congress called for competitive bidding on medical
equipment that is provided to elderly and disabled Americans and set a
sensible schedule for phasing in the program. Demonstration projects
were held, the results looked promising, and last year Medicare
received competitive bids from companies to supply equipment in 10
metropolitan areas.
With those companies about to start selling their wares next month,
Congress has bowed to pressure from the losing bidders. The House
approved legislation Tuesday that would terminate the contracts and
delay the launch for 18 months. In the Senate, key committee leaders
are leaning toward a delay.
This backtracking inevitably makes one wonder if major reform will
ever be possible in a medical marketplace dominated by imperfect
government bureaucracies and private lobbyists bent on resisting
governmental reforms.
There is little doubt that Medicare has been paying far too much for
equipment — including wheelchairs, hospital beds, oxygen concentrators,
diabetic test kits, and walkers — under fee schedules based on
historical charges. According to federal officials, Medicare currently
pays $1,825 for a hospital bed that can be bought online for $754, and
$4,023 for a power wheelchair that can be bought online for $2,174.
When Medicare awarded competitively bid contracts to some 325
companies to serve the 10 metropolitan areas, it reduced equipment
prices by 26 percent on what it would have paid for the same equipment
under the current fee schedule. That means that if the contracts were
allowed to proceed, beneficiaries would save 26 percent on their
co-payments. Medicare would save $125 million the first year and as
much as $1 billion a year if the program went nationwide.
Read more of this articleAbout Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Annuity Advice for Retirement: Evaluate and compare annuities at NewRetirement.com
NewRetirement Retirement Calculator: Assess your retirement plan with the NewRetirement Retirement Calculator.