$1.2 billion rip-off

The House just voted to block a bidding system that would mean that Medicare no longer pays $110 for a walker available at Wal-Mart for $60. Total cost to the taxpayers and beneficiaries: $1.2 billion per year.

Medicare currently buys medical devices &#8212 things like walkers &#8212 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 &#8212 my former colleague, and the only person I know who gets passionate about procurement reform &#8212 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.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com