This New York Times article published last Sunday provides good detail on the challenges associated with implementing an arms inspection deal with Syria. However, someone this week ought to do a comprehensive recap of the years of stalling done by North Korea, Iraq and Iran to stave off and otherwise jerk around U.N. arms inspectors. President Obama may have found a convenient excuse for calling off the attack on Syria, but despite the promises of the rogue countries when they agreed to inspections, has any such mission ever gone according to schedule? And this one is supposed to proceed apace in the middle of a civil war.
2. Runaway healthcare costs, 50 cents at a time:
The test strips that diabetics use to measure blood sugar levels can be bought for about 50 cents each in boxes of 50 at the local Walgreens. That doesn’t seem like much, but it can add up when the world’s biggest healthcare customer is doing the buying.
Medicare spends over a billion dollars a year to provide the test strips to about 4.6 million beneficiaries, according to a recently released report from the Department of Health and Human Services Office of Inspector General.
Buried in the report are juicy leads for two important stories — one about fraud and the other about lobbying that allows both the fraud and higher costs even when there is no fraud.
First some facts:
The report found what it called “questionable billing” amounting to $425 million of the $1.1 billion Medicare paid for the test strips in 2011, the year that was audited. That’s nearly 40 percent suspected overbilling.
Of the $425 million, $329 million was generated by bills from suppliers in just ten of the 955 geographic areas into which Medicare divides the country. Tops on the list were two Florida areas: Port St. Lucie, with $114 million in questionable billing, and Miami/Ft. Lauderdale/Pompano Beach with $113 million. (To put those numbers in context, that $114 million in potential overbilling for Medicare-funded test strips is more than 25 percent of the city of Port St. Lucie’s entire budget for that year.)
The report noted that Medicare initiated a competitive bidding process in 2011 in a small number of regions covering about 3 percent of the country. In those regions, suppliers of what’s called durable medical equipment were forced to compete on price (after passing certain quality tests). According to the Inspector General, the regions that launched competitive bidding saw an 87 percent drop in questionable test strip billing, while the rate of questionable billing everywhere else stayed about the same (it dropped 3 percent).
The report also noted that with competitive bidding the cost of a box of 50 test strips dropped to $14.62, compared to the $32.47 that Medicare pays where there is no competitive bidding. (Amazon sells a box of 50 for $27.85 — meaning that without competitive bidding Medicare, the world’s largest healthcare products customer, pays about 20 percent more than you or I would pay.)
These price comparisons are consistent with another Inspector General’s report that found that in those limited areas where competitive bidding was implemented for all durable medical equipment (including test strips) the prices paid dropped 42 percent. Because Medicare spends about $15 billion for these goods, that would mean that if competitive bidding was the practice all over the country, Medicare’s cost for all of this equipment would drop $6 billion a year.
Last fact: the geographic areas implementing competitive bidding were expanded last July — but neither Port St. Lucie nor Ft. Lauderdale/Miami/Pompano Beach were included, and those champions of questionable billing showed an increase in dubious test strip bills in 2011. However, in July Medicare initiated competitive bidding for mail-order suppliers of test strips across the country. That has dropped the average price to $10.41.
All of which is a road map for two promising stories.