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Journal of Health Politics, Policy and Law 1987 12(4):703-722; DOI:10.1215/03616878-12-4-703
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Applying Competitive Bidding to Health Care

Jeffrey S. McCombs
Health Care Financing Administration

Jon B. Christianson
University of Minnesota

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.


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