July 02, 2008
$1.2 billion rip-off
Medicare currently buys medical devices — things like walkers — using a "price list" system under which a walker you can get from Wal-Mart for $60 costs the government (and the beneficiaries, though their co-payments) $110. Under a new system of competitive bidding being rolled out by the Center for Medicare and Medicaid Services of DHHS, the government would save about $1B per year, and the patients another $200M.
The House just passed a bill to block the change: that is, to preserve the rip-off. It won't surprise you to learn that the medical-device makers are heavy campaign donors. This is how corruption really works in Washington, and I'd bet no legislator collected a bribe, as opposed to a campaign contribution.
Steve Kelman — my former colleague, and the only person I know who gets passionate about procurement reform — wonders whether some Senator will stand up and make a fuss. This would be a fine occasion to roll out Sen. Clinton's increased visibility in the public interest.
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