Provider Perspective:

NCB Means More Government Jobs

The administration infrastructure required by the program will represent a massive tax footprint.

Although it makes little economic sense, National Competitive Bidding (NCB) is a way to create a growing "business" of sorts for CMS which would last for years. Establishing such a large division to run NCB requires many employees and new systems to develop. In addition, there would be a growing number of products to introduce and rebids every three years to review and monitor.

This is a significant increase to CMS and its responsibilities, which was originally formed to process and monitor claims in accordance with the rules established by Congress. To be given the task to establish a nationwide auction for the provision of the top ten costing medical supplies, is simply outside their level of expertise. Yet, we are going forward, spending more money to administer the program than the savings which will be incurred.

What happens in a few years when all the prices of the products have stabilized and the savings from year to year is minimal, but the costs of running the program continue to escalate? Will CMS cut back their employees as NCB matures to a “smooth running system?”

Here are some cold hard facts which are enough to scare any American taxpayer:

    1. Since 1975, the American workforce has change from roughly 60 percent private industry and 40 percent government workers, to about 60 percent government and 40 percent private industry.
    2. In 1975, private industry was paid 26 percent more than government workers, but received less benefits, today government employees receive 21 percent on average higher wages and benefits
    3. In the last decade, government has increased workforce 16 percent and private industry has increased only 1 percent.

It is not surprising we are being railroaded by CMS and the government to accept NCB. Even the alternatives being considered to NCB is an auction by manufacturers. The amount of government jobs needed to create and administer such programs will be in the thousands, and their learning curve will cost a fortune before it runs properly. Of course, by that time we should have a whole new division of CMS, “Purchasing and Bid Administration Services,”which will replace some of the thousands of jobs stolen from industry and put into unproductive government jobs.

Perhaps government people are just trying to improve their lives by adding more responsibility and people to their area, like many of us in industry. It is only natural to want to grow your area of responsibility and the more people a government worker supervises, the more money they make themselves. There is no profit motive, only having more people to do more things that can be regulated. Unfortunately, this is unproductive to our society and industries. NCB is an excellent opportunity for CMS to grow, which makes it that more difficult to stop. Why isn’t the GSA involved? At least they have some expertise in contract management.

NCB will ruin the HME industry and grow CMS into a monster with no budget and a continued zeal for control. This is a very serious mistake which will be difficult to reverse since the people that control the situation have self interests which are contrary to good public policy. As an HME provider for 36 years it will be hard to be put out of business by NCB, but as an American it is devastating to know our country is being run into the ground by the naturally individual interests of the people in government. This socialistic climate is in every industry, and those powerful lobbyists, like the pharmacy association which has its members exempt from NCB, allow the select few to survive. This is all happening right now before our eyes and NCB is a perfect example of government vs industry. Just doesn’t seem fair that we are being put out of business by the people whose salary is paid for by us.

What are we going to do about it?

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About the Author

David Krause is president of President of AD Medical, Inc. which serves enteral and diabetic patients in the Chicago area.


Fri, Aug 19, 2011

Wans't your reference to the *** industry" actually intended for the pharmaceutical industry? There is no competetive bidding for pharmacies because it has long been a "take it or leave it" contract environment, with the insurance industry calling the shots. The Big Pharma industry is on the highest another level of lobbying power. Trust mem, there is no love lost between *** and the Pharmaceutical Industry.

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