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There are many ways to save money in our healthcare system, but the most attractive-sounding programs aren’t necessarily the best.
One example is the Medicare competitive-bidding program for durable medical equipment. Durable, or home medical equipment, enables patients and seniors to receive quality care at home. It provides a cost-effective alternative to institutional care, and seniors prefer to receive care at home rather than in an institution. Last year, a bidding program for home medical equipment was started in 10 areas, including Fort Worth, but it was delayed by Congress because of concerns about access to care and the impact on small businesses that provide home care. In the law delaying the program, Congress also required a 9.5 percent fee cut by home medical equipment providers nationwide to save seniors and taxpayers every dime that the bid program had been projected to reap.Now, the Medicare agency is restarting the bidding program, launching the process this week in Dallas-Fort Worth and in eight other U.S. metropolitan areas. This program was supposed to increase competition and reduce spending when providers bid for contracts to serve a given area for specific product categories. But in addition to lowering prices, the program also allows only a very small percentage of the low bidders to serve Medicare beneficiaries and excludes the vast majority of home-care providers — even if they agree to the lower, competitively bid prices. The result is fewer competitors, which means less access to quality care in the long run.Because the companies that provide home medical equipment rely on the Medicare-age population for rental or purchase of equipment and services, being excluded from Medicare is a death knell. Home medical providers already compete by providing quality service, because Medicare sets the fee schedule. Doctors and hospitals want to use providers who can deliver high-quality services quickly, and reducing the number of home-care providers reduces the choices available. Several economists have questioned the underpinnings of the Medicare bid program for home medical equipment. An article last year in the Southern Economic Journal concluded that the Medicare competitive-bidding process is "inefficient, leads to price increases and may cause decreases in the quality of services."Is there a way to save money in Medicare and allow providers to continue serving the millions of Americans who need home medical care? Yes. A bill in the House, HR 3790, would eliminate the bid program but preserve the projected savings to Medicare through a series of cuts to home medical reimbursements to match the projected savings. The legislation would also allow existing home medical providers to continue serving Medicare patients.The bill, introduced Oct. 13, has bipartisan support ranging from Democrat Eddie Bernice Johnson of Dallas to Republican Jo Ann Emerson of Missouri. Home medical equipment rates have been cut numerous times, and disproportionately so, in recent years. Spending growth in the home medical sector is virtually flat: less than 1 percent per year. And at just dollars per day, home-based care is vastly more cost-effective than a nursing home or hospital. Home care is not the problem with our healthcare system — it’s part of the solution. Congress should approve HR 3790 and allow home care to flourish.Tyler J. Wilson is president of the American Association for Homecare based in Arlington, Va.
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