Should doctors competitively bid for Medicare rates?

Frustrated by Medicare’s price-fixing tactics?

One idea is to introduce a competitive bidding system. It’s a well-known fact, and one that strongly influences current health policy decisions, that some areas of the country have more doctors and provide more medical services than others, with no additional, appreciable benefit.

In an op-ed in The New York Times, pulmonologist Peter Bach, former senior adviser to the administrator of the Centers for Medicare and Medicaid Services, proposes a “reverse Dutch auction” for Medicare reimbursements.

In essence, Medicare would set an artificially low rate for a given area, and if not enough doctors sign up, the rate would rise. The cycle would then be repeated until there are enough physicians for the area.

The idea is to save money, especially in dense physician areas.

But I can see it working the other way as well. For instance, there are many parts of the country where the wait for a Medicare patient to see a primary care physician spans months. By tying reimbursement to demand, it can be one way to force Medicare to increase their primary care rates in order to alleviate the shortage.

It’s a novel idea, but I wonder if it’s going to gain any traction in the health care debate.

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