In high school physical science, we were supposed to be learning about energy and engines and how stuff works. The truth is, I spent most of my time in
by Gail Walker gwalker@homecaremag.com

In high school physical science, we were supposed to be learning
about energy and engines and how stuff works. The truth is, I spent
most of my time in Mr. Hill's ninth-grade class trying to figure
out if he indeed (as my friends swore) had a glass eye.

You can imagine my grasp of the scientific subject matter,
although somehow I did come out of the year with the rudimentary
understanding that's it's hard to argue with evidence.

Skipping ahead, I recently read one of the most compelling
documents to cross my desk in a long while.

“Will Competitive Bidding Decrease Medicare Prices?”
is a study by two economics professors who took an in-depth look at
the 1999 competitive bidding demonstration projects in Polk County,
Fla., and San Antonio, Texas. The academic paper may not be the
stuff of a best-seller, but one glance at the summary page was
enough to keep me riveted.

The authors — Brett Katzman of Kennesaw State University
in Atlanta and Kerry Anne McGeary of Philadelphia's Drexel
University — conclude that CMS' basic competitive bidding
format is flawed, in some instances even resulting in higher prices
and poorer quality of service. Here it is in their own words:

“The theoretical results found in this paper show that the
CMS format will likely result in an inefficient supply of medical
equipment, increased prices on a number of goods and potential
problems for beneficiaries in obtaining equipment.”

What's more, the good professors, who presented their paper in
the peer-reviewed Southern Economic Journal, also put forth
empirical evidence that supports their findings. I won't pretend
I'm smart enough to understand their economic formulas. But there's
no mistaking that after 17 pages of examining the evidence from the
demonstrations, these experts don't think competitive bidding is
going to work.

Of course, providers in Florida and Texas who participated in
the demonstration projects have been telling CMS such things for
years, but their anecdotal pleas have been pitted against the
agency's view of the demonstrations, which, according to government
officials, couldn't have gone better. At times, I have wondered if
those providers and CMS were even talking about the same
experiment.

Now, however, it seems attention must be paid. As CMS prepares
to implement competitive bidding on a much larger scale, this
study's results show beyond a doubt that the outcome may not be as
rosy as the agency would have us believe. Just like Mr. Hill used
to say, “Facts are facts.” And this study is based
squarely on them.

Many in the industry have been holding out hope that a knight in
shining armor would ride up to rescue them from certain ruin under
the Medicare bidding program. I've warned against such thinking in
this very column because that kind of thing usually happens only in
fiction. I don't know whether Professors Katzman and McGeary own a
horse, but their study does offer a solid argument against
competitive bidding in its current form.

In short, the industry has some new allies — the facts.
And with the reality of competitive bidding drawing closer by the
day, it's time to use them. Mr. Hill would be so proud.