Reports: Competitive Bidding Would Harm State Economies

Two new reports released by The VGM Group predict Medicare's competitive bidding program for DME would harm the economies of both large metropolitan and rural areas.

The studies were conducted by Kenneth Brown, Ph.D., department of economics, University of Northern Iowa. He is described in a news announcement as an expert on the bidding program and other Medicare regulations.

Brown estimated that Utah would lose 2,700 jobs and see its economic output shrink by $200 million annually once competitive bidding takes hold in the state.

The state of Montana would lose more than 900 jobs, Brown said, with its state economy losing $55.1 million annually.

"Some members of Congress believe that there will be no impact on rural areas, but this report reviews that view," VGM's news statement said, referring to the Montana study. Brown attributed the predicted losses to a significant reduction in total medical equipment expenditures.

"Brown concludes that the Medicare bidding regulations will also result in Montana HME businesses closing because those who don't win the fractured auction process can't bill Medicare for many categories of products," the VGM announcement explained. "Business closures reduce the proximity of patients to suppliers, which will reduce access to healthcare throughout the state."

HME businesses in Utah would also close due to less money being spent on medical equipment, Brown said. VGM added that in areas of the country made to participate in competitive bidding's round 1, more than 220 HME businesses have already closed down.

"Hospital-based providers in Salt Lake City may not be winning bidders, which could result in patients staying longer in the hospital while equipment arrangements are made, or going home without necessary equipment," VGM pointed out.

Brown said in his report, "In locations that once had a provider and do not, the length of time to discharge from a hospital may increase. It might increase the wait time for wheelchair repairs. Or, it could reduce the frequency of delivery of portable oxygen tanks or impact the ability of providers to respond promptly in cases of widespread power outages." The ripple effects of competitive bidding would probably result in reduced quality and access to healthcare in Utah "with much higher additional medical costs elsewhere in the healthcare system."

To view the entire Utah-focused report, click HERE.

To view the report focusing on Montana, click HERE.

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at

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