The Centers for Medicare & Medicaid Services says its “Competitive Bidding Program” for medical equipment is designed to save taxpayers money. However, when the government tries to outsmart the free market, patients often pay the price.
CMS is now proposing to expand its Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program to include urological, tracheostomy and ostomy supplies — products that serve some of the most vulnerable Medicare beneficiaries. It’s a move that may look fiscally responsible on paper, but, in practice, it threatens to erode patient care, stifle innovation and distort the market principles that keep costs fair and quality high.
Competitive bidding sounds like free enterprise. It’s not. It replaces the market with a centralized, government-run price-setting system. Instead of encouraging innovation, transparency and quality service — the hallmarks of true competition — it rewards suppliers willing to accept razor-thin margins, often at the expense of patient outcomes and product quality.
These are not commodity items. Urological, tracheostomy, and ostomy supplies require customization, patient education and clinical oversight. The best suppliers compete not on price alone but on value, personalized service, reliability and patient support. When Washington sets prices too low to sustain those services, small and mid-size suppliers exit the market. What follows is predictable — fewer suppliers, less choice and more market consolidation.
When patients are funneled toward a handful of low-bid contractors, access and quality suffer. The cheapest product is rarely the best fit, especially for patients whose daily health depends on the right supplies. That mismatch can lead to infections, emergency visits, and higher costs to the Medicare system — precisely the opposite of what CMS intends.
The ripple effects extend beyond patient care. Competitive bidding discourages manufacturers from investing in new technologies and quality improvements. It disincentivizes the very competition and innovation that the free market naturally delivers when government steps back.
There’s a better way to achieve cost savings. CMS should strengthen market-based mechanisms that promote transparency, reward value over volume, and empower patients and providers to make informed choices. Value-based reimbursement models, quality reporting, and price transparency can reduce waste without sacrificing patient access or market diversity.
The expansion of competitive bidding into these specialized product areas would undermine patient care and the integrity of the free market. CMS should withdraw this proposal and work with stakeholders to design policies that respect economic principles and serve patients — not bureaucratic efficiency.
When the government tries to pick winners and losers in the name of “competition,” the real losers are patients and taxpayers.
