Keeping Costs Down While Keeping Quality High
By Chris Dawe, Director of Delivery System Reform, HHS Office of Health Reform
Today we have good news for seniors and people with disabilities who rely on Medicare for things like hospital beds and diabetes test strips: we’re expanding a program that will save you money.
This welcome news is thanks to a program launched last year, which requires companies that sell medical equipment to compete for Medicare’s business According to a new report, in nine areas of the country, people with Medicare saved an average of 35 percent on medical equipment and supplies.
- Patients needing oxygen concentrators saved $168 per person in 2011 alone, and can expect to save as much as $504 over the three-year rental period;
- Diabetics using multiple batches of testing strips each month saved up to $140 in 2011, and will see those cost savings multiply in the coming years; and
- People on Medicare needing hospital beds in their homes saved as much as $105.
All told, the durable medical equipment competitive bidding program saved Medicare $202 million in 2011.
And, today’s report shows that seniors and people with disabilities continued to have access to the quality products they needed, and they received satisfactory customer service from the suppliers with the best bids. Seniors and people with disabilities in the program were no more likely to visit the emergency room or end up in a nursing home than beneficiaries in other parts of the country.
Before the competitive bidding program, companies had a financial incentive to give those on Medicare more supplies than they needed, leaving many beneficiaries, for example, to pay the bill for closets full of diabetic strips they did not need. It’s not surprising then that durable medical equipment suppliers had been popping up all over the country for years – so much so, that there are now six times as many suppliers as McDonald’s in the U.S.
And thanks to the health care law, people on Medicare in other parts of the country won’t have to wait long to enjoy similar savings. The Affordable Care Act expanded the competitive bidding program: it will reach 100 total areas by next year and all parts of the nation by 2016. According to the latest independent estimates from Medicare, the program will save Medicare beneficiaries $17 billion by 2022 while reducing Medicare’s costs by another $25.7 billion. That’s money back in the pockets of people on Medicare and taxpayer dollars spent more wisely.
To see the report released today that discusses the program and its savings visit this page.