Journal article
Will Competitive Bidding Decrease Medicare Prices
Southern Economic Journal, v 74(3), pp 839-856
2008
Abstract
Recent measures to reduce Medicare spending include the use of competitive bidding in determining reimbursement prices. Several competitive bidding experiments have been conducted by the Centers for Medicare and Medicaid Services (CMS) to determine reimbursement prices. This paper investigates the use of competitive bidding to set reimbursement prices for durable medical equipment, prosthetics, orthotics, and supplies. First, the competitive bidding process is examined on a theoretical level. It is shown that the CMS competitive bidding process (auction) is inefficient, leads to price increases, and may cause decreases in the quality of services. Next, data supporting the theoretical predictions are presented. Finally, we suggest that a descending variant of the Ausubel, Cramton, and Milgrom (2006) clock-proxy auction be used.
Metrics
5 File views/ downloads
7 Record Views
Details
- Title
- Will Competitive Bidding Decrease Medicare Prices
- Creators
- Brett Katzman - Kennesaw State UniversityKerry Anne McGeary - Drexel University
- Publication Details
- Southern Economic Journal, v 74(3), pp 839-856
- Publisher
- Southern Economic Association
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Bennett S. LeBow College of Business
- Other Identifier
- 991014632415704721