COMPETITIVE BIDDING - SIZE MATTERS

Needless to say, the controversy over competitive bidding is only going to get hotter.

As reported in HME News, Washington is taking another look at the process after the latest round of bid winners were announced.

The winners naturally anticipate they will be able to grow their business and capture increased market share. Additionally, with more volume they think they will be able to cut their costs since they will be able to use volume purchases to offset the price increases that vendors have passed through. Those who lost the competitive bidding wars are concerned about whether they will be able to stay in business. And the vendors will walk a tightrope in going after the winners to increase business without threatening the losers who will still have markets to serve.

While the impetus for the program revolved around the idea of reducing the costs to medicare, the proof will ultimately be in how much of a cost reduction actually will occur. And at what cost? Some of the questions I have are as follows: Will the winners put the losers out of business or drive them to more effectively uncover new markets? Is this another example of bigness triumphing over the small guy and putting people out of work. And what protection is there in the next round of bidding, if the winners have reduced the number of competitors, that would keep the winners from increasing their medicare bids without fear of competition. These are just some of the issues surrounding the competitive bidding process.