Getting the price right?: the impact of competitive bidding in the Medicare program

Getting the price right?: the impact of competitive bidding in the Medicare program

Collection:
Health Policy and Services Research
Series Title(s):
Working paper (Stanford Institute for Economic Policy Research)
Author(s):
Ding, Hui, (Researcher in medical and public economics), author
Duggan, Mark G. (Mark Gregory), author
Starc, Amanda Kay, author
Contributor(s):
Stanford Institute for Economic Policy Research, issuing body.
Publication:
[Stanford, CA] : Stanford Institute for Economic Policy Research (SIEPR), February 3, 2021
Language(s):
English
Format:
Text
Subject(s):
Competitive Bidding
Medicare -- economics
Durable Medical Equipment -- economics
United States
Genre(s):
Technical Report
Abstract:
We study Medicare’s competitive bidding program (CBP) for durable medical equipment (DME). We exploit Medicare claims data to examine both prices and utilization, focusing on continuous positive airway pressure (CPAP) devices to treat sleep apnea. We find that spending falls by 47.2% percent after a highly imperfect bidding mechanism is introduced. The effect is almost entirely driven by a 44.8% price reduction, though quantities also fall by 4.3%. To dis-entangle supply and demand, we leverage differential cost sharing across Medicare recipients. We measure a demand elasticity of -0.272 and find that quantity reductions are concentrated among less clinically appropriate groups.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
Extent:
1 online resource (1 PDF file (49 pages))
Illustrations:
Illustrations
NLM Unique ID:
9918383970906676 (See catalog record)
OCLC no.:
1327813441
Permanent Link:
http://resource.nlm.nih.gov/9918383970906676