[Ip-health] Medicare Savings vs. the Lobbyists

[Joana Ramos]

http://www.nytimes.com/2008/06/25/opinion/25wed1.html?scp=3D3&sq=3DMedicare=
&st=3Dcse

NY Times
June 25, 2008
Editorial
Medicare Savings vs. the Lobbyists

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 =97 including wheelchairs, hospital beds, oxygen concentrators,
diabetic test kits, and walkers =97 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.

Such projected savings pale, apparently, in the face of outraged
lobbyists. A trade association has sued to stop the program on the
grounds that companies were not told what financial standards they had
to meet to be deemed eligible, and industry lobbyists have persuaded key
members of both parties in Congress to back off.

Medicare officials have made some missteps in conducting the bidding,
but many of the complaints sound like sour grapes from companies whose
prices were too high to compete.

Meanwhile, many patient-oriented groups have also called for a delay,
apparently fearing that switching suppliers, perhaps from a local
company with personalized service to a lower bidder elsewhere, could
diminish the quality of service. These fears seem overblown and should
be easily addressed in coming months, partly by strengthening oversight
by ombudsmen and surveying beneficiaries to detect and remedy any problems.

The House bill would try to recoup the money lost from deferring
competitive bids by imposing a nationwide cut of the scheduled fees for
such durable equipment. That is at best a temporary fix.

The Senate should resist the delay. Competitive bidding is a smart way
to help Medicare control equipment costs at a time when all medical
costs are soaring and there is relentless pressure to reduce Medicare=92s
services or raise charges to beneficiaries.

Congress must ensure that any delay it imposes does not become a prelude
to junking the program for good. There is never a good reason for
Medicare to pay far more than the market rate for medical equipment. And
certainly not in times like these.

----------------

Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramoslink.info/
www.bmtbasics.org