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At least 19 recordsLinked to original sources
PubMed1996

A decision model for competitive bidding.

Competitive bidding and selective contracting, an alternative mechanism for harnessing competitive forces, are already fairly common in the private sector. Interest in competitive bidding as a mechanism for setting fee schedules is growing in the health care sector. This article focuses on bidding as an alternative to price negotiation. The techniques and problems discussed here are applicable when the bidder has only one chance to make a bid.

Competitive Bidding↗
PubMed1993

Competitive bidding for Medicare services.

One of the key issues in implementing prospective Medicare fee schedules is how to set prices that accurately reflect competitive market forces. Competitive bidding has long been used in government procurement efforts for nonhealth services. In this paper, we evaluate how provider behavior will be affected if Medicare uses competitive bidding to set Medicare fee schedules. Our model provides several important insights about competitive bidding for health care services. First, the model shows that competitive bidding will lead to 2-stage competition between providers. In the bidding stage, providers will compete to submit winning bids. In the following stage, winning providers will compete for business through marketing efforts that may enhance quality. Second, the model shows how the design of the bidding mechanism affects bidding strategies and the importance of individual provisions within the design, such as penalties for losing bidders. Third, the model demonstrates how competitive bidding will affect quality. It shows how quality may deteriorate if the bidding mechanism chooses an exclusive winner and why naming multiple winners can keep quality at acceptable levels. Finally, we identify criteria for determining whether a particular type of Medicare service is well-suited for competitive bidding.

Competitive Bidding↗
PubMed1998

Medicare's demonstration of competitive bidding for clinical laboratory services: what it means for clinical laboratories.

The purpose of Medicare's Demonstration of Competitive Bidding for Clinical Laboratory Services is to determine whether competitive bidding can be used to provide quality laboratory services at prices below current Medicare reimbursement rates. Here, we present key features of the preliminary design for the demonstration. The following areas are covered: scope of the demonstration, bidding process, selection of winners, reimbursement, quality, and administration and monitoring. The role of the Health Care Financing Administration's Laboratory Technical Advisory Committee is also described, and the future of competitive bidding in a Medicare managed care environment is evaluated. We close with some brief comments on how to succeed in competitive bidding for Medicare services.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1987

Competitive bidding for home care under the channeling demonstration.

Competitive bidding is a relatively new strategy for setting rates and choosing providers for public medical care programs. In this article, the experience in competitive bidding by home health care providers and homemaker agencies in the National Long-Term Care Channeling Demonstration is described. Particular attention is paid to contrasting approaches that select a single winning bidder with those that select multiple winning bidders for the same service. Results are discussed with respect to bid prices, characteristics of winning bidders, administrative demands, and service delivery.

Aged↗
PubMed1997

Developing Medicare competitive bidding: a study of clinical laboratories.

Competitive bidding to derive Medicare fees promises several advantages over administered fee systems. The authors show how incentives for cost savings, quality, and access can be incorporated into bidding schemes, and they report on a study of the clinical laboratory industry conducted in preparation for a bidding demonstration. The laboratory industry is marked by variable concentration across geographic markets and, among firms themselves, by social and economic heterogeneity. The authors conclude that these conditions can be accommodated by available bidding design options and by careful selection of bidding markets.

Aged↗
PubMed1986

Competitive bidding: they're singing the blues in Cleveland.

When Blue Cross and Blue Shield of Northern Ohio announced a selective contracting program based on competitive bidding, the greater Cleveland hospitals were shocked. This process required competitive bidding for all lines of Blue Cross business including inpatient and outpatient hospital services. A lawsuit against Blue Cross was filed by Lakewood Hospital. The program was declared illegal, but an appeal is pending that could set precedent for other Blue Cross plans that may try other forms of competitive bidding in the future.

Blue Cross Blue Shield Insurance Plans↗
PubMed1987

Applying competitive bidding to health care.

This paper reviews the empirical literature on competitive bidding for health services under public programs and, in this context, discusses the major issues that must be confronted in designing bidding systems. These issues include the specification of units of service, the selection of winning bidders, the determination of reimbursement for winning bidders, the treatment of losing bidders, and contract enforcement. The paper then illustrates these issues in practice by outlining one possible competitive bidding system for purchases and rentals of durable medical equipment under the Medicare program.

Competitive Bidding↗
PubMed1983

Competitive bidding for laboratory services, supplies, and equipment.

A procompetition approach to reducing health care costs has moved from the discussion stage to implementation. The Omnibus Budget and Reconciliation Act of 1981 called for competitive bidding for laboratory services. The Health Care Financing Administration recently awarded a contract to the Center for Health Policy Studies for the development of a competitive bidding system for clinical laboratory services. In 1981 an ASMT Task Force appointed by the Chair of the Government Liaison Committee developed the following White Paper on Competitive Bidding for Laboratory Services, Supplies, and Equipment. The Paper was considered for comment by the 1982 ASMT House of Delegates and adopted by the Board of Directors in October, 1982. This paper provides members of the Society with practical information on using the competitive bidding process in their own work setting. The Chairman of the Task Force was Walter Valliere of Houston, TX, with the final revisions of the Paper being prepared by John P. Smith of Wichita, KS.

Accreditation↗
PubMed1984

Competitive bidding as a cost-containment strategy for indigent medical care: the implementation experience in Arizona.

The State of Arizona recently instituted a competitive bidding process, in order to establish a health services delivery system for indigents and to determine capitated reimbursement levels for providers in that system. This article describes the implementation of that bidding process, and identifies factors which had a significant impact on the implementation experience. Implementation of competitive bidding in Arizona encountered problems which appear to be common to the implementation of innovative public programs. It also uncovered political liabilities that suggest that effective implementation of competitive bidding for indigent medical care contracts in other environments will be difficult, even if technical implementation problems can be overcome.

Arizona↗
PubMed1984

A comparison of existing and alternative competitive bidding systems for indigent medical care.

Competitive bidding is gaining in popularity as a means of containing costs in indigent medical care programs. The economic implications of the bidding systems employed by Arizona and California are discussed in light of the existing literature. Two alternative bidding approaches are proposed for consideration by policymakers--the sealed bid 'Vickrey' auction and the 'ascending Dutch' auction. While the incentives it contains for providers are not optimal, the ascending Dutch auction has the greatest potential for effective implementation since it accommodates the realities of public sector budget constraints and political pressures for direct control over program expenditures.

Arizona↗
PubMed1986

Competitive bidding and states' purchase of services: the case of mental health care in Massachusetts.

Over the past two decades states have significantly increased their use of competitive bidding to purchase health and social services from private agencies. Competitive contracting is thought to facilitate program administration, to reduce costs, and to increase the quality of delivered services. We evaluate these claims in light of Massachusetts' experience with competitive contracting for mental health care. We find that few of the expected benefits are achieved. In practice, supposedly competitive bidding systems often degenerate into administratively complicated negotiations between the state and private monopolies. This results in higher costs and lower quality of services. In light of this negative assessment, three strategies for reform are proposed and evaluated.

Competitive Bidding↗
PubMed2002

Competitive bidding for interventional cardiology supplies: lessons learned during round 2.

OBJECTIVE: To assess the magnitude of savings and develop concepts for "best strategies" in reducing costs in the purchasing of high-technology, high-cost materials used in coronary interventions and electrophysiologic treatments. STUDY DESIGN: Observational experience in competitive bidding for defibrillators, pacemakers, coronary stents, and coronary balloon catheters at a large, midwestern, publicly owned, academic cardiovascular center. METHODS: Iterative negotiation following a broad request for proposal sent to a diverse group of vending organizations in high-technology areas of cardiology. Product costs and volume usage were assessed before and after the process to estimate annualized cost reduction achieved. RESULTS: Using a combination of identification of preferred vendors; consignment of supplies; and collaborative consensus among physicians, administration, materials management, purchasing, and vendors, an annualized savings of more than $1.3 million was achieved. CONCLUSIONS: Aggressive, collaborative, fair, and competitive bidding for high-cost products used for coronary interventions and electrophysiologic treatments leads to substantial cost savings and can promote provider-industry partnerships that further enhance product use, provision, and tracking.

Cardiology↗
PubMed1992

Competitive bidding for health insurance contracts.

The determination of the payment or premium to be paid to the insurer by a large purchaser of care must accurately represent the risk of the enrolled persons. One approach is a risk-adjusted payment established by a mathematical formula, which estimates the effect of many variables on total care costs, and for different groups of persons determine an average cost. This method has several problems, and an alternative is competitive bidding. Market forces pressure providers to offer the lowest possible bids while attempting to remain fiscally viable and provide high-quality services. Research from the U.S. demonstrates that competitive contracting effectively lowered the costs of health care for those sectors of the health care system that used this strategy. Bidding by area gave far more equitable results than could have been obtained with a state-wide system with crude adjustments for each area. It is an alternative which can create strong incentives for innovation and cost-containment, and at the same time allows insurers to take into account local variation in supply and demand of care. As a potential alternative to a regulatory system, competitive bidding should be considered for regional experimentation in health insurer payment.

Actuarial Analysis↗
PubMed1987

An analysis of purchasing services via competitive bid.

Ohio's community mental health system is structured much like other states', with local government boards that contract for community mental health services. Community mental health boards are the local planning, funding, and evaluating bodies that are prohibited, except under special circumstances, from directly operating mental health services. The services are delivered by human service agencies--mostly private, not-for-profit corporations. Obviously, the contract between the board and an agency is an important document that defines the relationship between the two organizations. As the demand for greater accountability and increased productivity appeared, boards altered contracting methods. Some boards employ a grant-type contract. Others use performance contracting. Still others use a purchase of service methodology, either with or without performance standards. As these techniques have been further refined, some boards have opted to purchase services via competitive bid.

Community Mental Health Services↗
PubMedDate not supplied

Shelf price agreements: a novel approach to competitive bidding for arrhythmia therapy devices.

Over the past decade, the financial pressures from variations in reimbursement and payer mix, combined with rapidly evolving technology, has forced healthcare institutions in the United States to seek out further options for cost savings. In the arena of interventional cardiology, the ability to successfully negotiate the lowest possible cost for a relatively small number of high-cost devices can result in significant savings. Historically, competitive bidding with market-share guarantee to a preferred vendor or two initially resulted in moderate cost savings. However, in 2003 our institution embarked on a novel approach in which we defined the price to be paid, and we challenged our vendors to meet that price. Early results of this aggressive strategy suggest that it is a successful technique in reducing supply costs and maintaining collaborative relationships with vendors while remaining fair and competitive.

Arrhythmias, Cardiac↗
PubMed1983

Financing long term care under Medicaid: competitive bidding, vouchers and expenditure matching in an HMO framework.

Within the framework of a Long Term Care--HMO, a series of innovative financing mechanisms are proposed to encourage efficiency, reduce cost increases and promote the quality of long term care. Competitive bidding is used to set prices for long term care. Based upon these competitively set prices, HMO enrollees are given long term care vouchers with which to purchase care. Cost savings, arising from choices of care less expensive than the value of the voucher, are shared with the enrollee and the case management team. Incentive payments to this team are made only after a quality of care review. A portion of the payment to the long term care provider is set aside as a quality assurance withhold. If quality of care is inadequate, the withhold is forfeit.

Health Maintenance Organizations↗