Death in Pittsburgh?

CMS data appears to show that Medicare beneficiaries in Pittsburgh who receive Durable Medical Equipment (DME) through CMS’ competitive bidding program have higher death rates compared to Detroit which does not yet have DME acquisition through the bidding program.  As an article in Inside Health Policy observed,

For example, charts in the CMS report show that death rates were higher in Pittsburgh, where products are competitively bid, compared with Detroit, where there is no bidding.

Higher death rates of Medicare beneficiaries as a result of competitive bidding was also expected by Professor Peter Cramton of the University of Maryland based on his analysis of CMS data.  As Dr. Cramton explained,

Recent CMS data show the implication of the decline in utilization: higher risk of death, higher frequency of ER visits and hospitalization, and longer hospital stays. These results suggest that the cost savings in Medicare DME are dwarfed by the much higher costs to Medicare coming from increased hospital care.

Dr. Cramton, who provides advice to federal agencies and has testified before Congress on auction policy, explained that

The decline in utilization means there are more non-utilizers, which means there are more bad health outcomes. Those are all indicators that the program, rather than saving the taxpayers money, has a very real but hidden cost, which is that the cost simply falls in a different category within the Medicare system.

CMS has already begun to implement competitive bidding throughout the country.  White House and Congressional study of the impact of the existing competitive bidding program should be undertaken prior to placing additional seniors at risk.

InsideHealthPolicy.04.18.12