R Street’s Peter Cramton on Medicare’s bizarre auction process
The above video includes R Street Associate Fellow Peter Cramton, professor of economics at the University of Maryland and one of the nation’s foremost experts in auction theory, testifying before a Sept. 11 hearing of the U.S. House Small Business Committee’s Subcommittee on Healthcare and Technology on “Medicare’s Durable Medical Equipment Competitive Bidding Program: How are Small Suppliers Faring?”
The hearing examined the bidding process created by Congress in 2003 to manage Medicare payments for durable medical equipment, prosthetics, orthotics and supplies. Intended to address a fee schedule that was plagued with high error rates and above-market costs, the bidding process has been criticized by Cramton and others as inefficient and unable to serve the best interests of beneficiaries, taxpayers or the medical equipment market.
