Original Medicare is a private fee-for-service system. In essence, Medicare says what it is willing to pay for health care services for seniors, and that’s what healthcare providers charge in order to participate in the business. At first blush it might seem like this is a good system, but is it really? Wouldn’t a free market system be better?
USA Today reported that a new competitive bidding pilot program (see Medicare bidding program boosts savings on medical equipment) save money. Go figure!
“A new competitive bidding pilot program that replaces Medicare fee schedules for durable medical equipment — such as wheelchairs, oxygen tanks or diabetic test strips — has saved Medicare $202 million in its first year, according to a report released Wednesday by the government.”
This is a fact that most of us have known for years. In fact the Medicare Advantage program, created as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, is a free market system that’s been saving the government money for the better part of a decade. So, why do we need pilot programs like this one? After all, the result is predictable, isn’t it?
“Centers for Medicare and Medicaid Services officials predict the program, if expanded nationwide, could save seniors and people with disabilities $17.1 billion over the next 10 years. And, the Medicare trust fund would also see savings of $25.7 billion. The pilot program includes nine metropolitan areas.”
Here’s the twist you wouldn’t expect and it made me angry:
“The pilot program originally began in 2007 in an effort to cut costs and combat fraud, but Congress then passed a law terminating the original study and delaying further pilots because there were fears about how it was being implemented.”
Come on Congress, what’s the beef? We need a free-market system that encourages lower costs through competition. Not a one-size-fits all, government bureaucracy that promotes more fraud, waste and abuse.