Competitive Bidding savings Money, but loses Experience

The ongonig debate about the United State's budget has continued deep into the summer. Much of the debate has centered around medicare and the government's role in health care funding. One compromise plan proposed has is called "Competitive Bidding." Simply put: 

All plans in a market (e.g., a county), fee-for-service included, offer bids for the cost above the standard Part B premium of provision of a standardized set of benefits (e.g., the current Medicare benefit) for an average beneficiary. The lowest bid in a market — whether from a private plan or from fee-for-service Medicare — establishes the subsidy (premium support) offered for enrollment into any plan in the market. This amount would then be risk-adjusted according to beneficiary health status. Beneficiaries opting for plans with higher costs (bids) or additional benefits would pay the additional cost. Means testing or a low-income subsidy program, as exists in today’s Medicare, could be incorporated to protect poorer beneficiaries from high residual out-of-pocket costs.

This sort of plan could satisfying both sides of the ideological debate. 


There is, however, a problem. By basing all pricing on a bid process, small, locally focused  home healthcare providers might be pushed out of the market by large national companies. According to one study, lowball bids from large providers could introduce inefficiencies and accounted expenses to the current system.


It also pushes more expenses providers out of the market. By undercutting smaller companies, large providers will be able to place inexperienced nurses and medical techs into homes without a free of medical backlash.  


Chicago Home Care