Professors Say Bid Program Will Harm Patients, Lower Quality, Raise Costs

Erwin A. Blackstone, professor of Economics at Temple University and Joseph P. Fuhr Jr., professor of Economics at Widener University, published a critique of the Medicare bidding program. Both are senior research fellows at The American Consumer Institute. Their critique concludes:

“This inefficient Medicare auction system will harm many beneficiaries. The result will be lower quality of products, fewer services, less education provided to consumers and shortages, which will affect access to needed equipment. It is important to preserve incentives for high quality products and product innovation in such an important consumer market. This will lead to lower quality of life for the elderly through longer hospital stays, more emergency room visits, and loss of independence if the elderly can no longer stay at home and must go into long term care. An added consequence is higher cost of care as more beneficiaries are shifted from low cost home health care to higher cost facilities. The auction system as presently comprised will lead to government failure and decrease consumer welfare.”

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