HME Business

Observation Deck:

NCB vs. Jobs

A letter to the President.

• By David Krause
• Sep 20, 2011

As you have genuinely attempted to promote job growth in America, with little success, and have now asked for another $458 billion to further promote job growth, why is CMS going to continue with National Competitive Bidding (NCB)?

The goal CMS has set to save through this program is $28 billion over the next 10 years. This goal could be accomplished in many ways without the added significant costs to increase CMS staff to develop a bid system, for which they have no expertise. This waste of taxpayer funds to have CMS educate itself on how to implement NCB, is a travesty in itself. The fact that CMS is having such difficulty confirms they are inept and there is problem in the concept.

CMS could simply reduce fees across the board and achieve savings in accordance with budget constraints, leaving providers the choice to accept the fee level or not provide the service. Instead, CMS blindly forges ahead, and continues to add costs trying to implement this job-killing program.

And kill jobs it will. There is no question that purposely reducing the amount of providers to Medicare from 65,000 to 5,000 will cost many thousands of small businesses to close their doors. That is the purpose of national competitive bidding — to reduce providers.

There will, of course, be significant drops in service levels to patients, but this is not quantifiable, and therefore is really of no concern other than lip service from CMS and politicians. However, some simple economics proves killing all those jobs will be a wash to the government in actual savings. If only half of the 65,000 providers go out of business employing an average of seven people each that is a loss of 227,500 jobs. Assuming 200,000 go on unemployment at a cost of $15,000 a year, that totals $3 billion a year, the hopeful projected annual savings of the NCB program. If you add the administrative costs to develop and administer the program, the lost tax revenue from individuals and businesses, and the lost spending dollars of those individuals, the economic consequences of NCB are negative.

Although these numbers may be oversimplified, the problems of what is about to happen to our industry are very real and unprecedented.  Did we mention the costs of anguish and hardship to the many families of the individuals you are legislating out of work? What additional costs will the patients incur as a result of so few providers? How can you with good conscience continue with NCB?

Job growth in America is not just providing government jobs and allowing CMS to grow and operate a new ill-conceived program. In the last 10 years, government jobs have increased 16 percent, while private industry is only up 1 percent.  Congress and CMS should have better solutions to the budget than allowing this to continue being a nightmare for the industry and patients — a nightmare called NCB.

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