Tuesday, February 7, 2012

Wall Street Journal Bashes the Bidding System

Today’s lead editorial in The Wall Street Journal describes the design of the current Medicare bidding program as “idiotic and designed for failure.” The scathing critique praises the concept of competitive bidding but notes that Round One (what it calls the “pilots”) was a disaster. “Medicare cooked up an auction process that defies all economic sense.”

“The current nationwide rollout has no substantive revisions from the failed pilots, despite the objections of 244 economists and auction scientists led by the University of Maryland’s Peter Cramton. The consensus of basically everyone who knows anything about auctions is that the no-risk bids and median pricing are idiotic and designed for failure.”

The link to the text and online comments is here.

1 comment:

Anonymous said...

Overall, this is very supportive for our industry's position on this terrible payment plan. We still need to press the lawmakers and CMS to use the authority they have to set prices without the need for the destructive competitive bidding plan. We also need to have our lobbyist working with Sen Wyden and Rep Ryan on their proposal, it's not too late!