Tuesday, May 21, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, December 26, 2011
The Federal Government's Deeply Flawed System for Controlling Medicare Costs
By NCPA @ 2:58 PM :: 4517 Views :: National News, Ethics

From NCPA

With Medicare's hospital trust fund set to be exhausted by 2024 according to the latest report from the program's trustees, federal officials are understandably looking for easy ways to cut spending in the entitlement program. On this subject, they emphasize the efficacy of the two-year-old effort to introduce "competitive bidding" into the process for buying medical equipment, says Sally Pipes, president and CEO of the Pacific Research Institute.

The Centers for Medicare and Medicaid Services (CMS) launched its competitive bidding program for medical devices and equipment in 2009. It purchases a host of medical supplies and equipment through the auctions, touting the method as the best means by which the government can efficiently spend taxpayer money. However, the market-subverting policies of the CMS auctions have many deleterious effects on health care throughout the United States.

  • Irrational auction rules and a non-binding bidding process drive legitimate suppliers out of the market and set prices at below-equilibrium levels.
  • The loss of legitimate suppliers often causes shortages of vital medical equipment and supplies.
  • The depressed prices from CMS auctions decrease investment in health care research and development by between $2.1 billion and $3.1 billion each year.
  • It is estimated that this depressed investment, by limiting health care innovation, causes the loss of 500,000 life-expectancy years in the United States.

These negative effects should not be ignored. Medicare and Medicaid policies have substantial effects on the health care market as a whole: the two programs shelled out $10.4 billion of the $34.9 billion the nation spent on medical equipment in 2009, and this figure is expected to rise to 40 percent over the next decade.

In order to avoid these negative consequences and maximize optimization gains from auctions, CMS should consider market-favored alterations to its system.

Source: Sally Pipes, "The Federal Government's Deeply Flawed System for Controlling Medicare Costs," Forbes, December 12, 2011.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii