Changes in Medicare that Affect Medical Supplies

Changes in Medicare that Affect Medical Supplies


There will be a slew of significant shifts in the health sector in the coming years that will have many people scratching their heads. From big Medicare reforms that will impact the manufacturing base of certain drugs to nationalized healthcare, which will alter the health insurance landscape, there is a lot on the table.

 Your approach to purchasing medical supplies and facilities is likely to change dramatically. You’d actually be a millionaire by now if you really knew what exactly the effects of these reforms would be. But, for the time being, all we can do is try to comprehend what the reforms will mean to the majority of Americans in the coming years. Here are various changes in Medicare that influence the medical supply marketplace:

1.      Competitive Bidding

Let’s start with a significant shift in Medicare’s structure known as “Competitive Bidding.” Medicare is implementing this reform to reduce the number of vendors used and, as a result, the total administrative expense of managing some aspects of the Healthcare system. Medicare can benefit not only from a logistical standpoint but also from a buying standpoint.

Suppliers would be incentivized to lower their rates as part of most bidding schemes, resulting in substantial savings in the form of lower reimbursements charged for such products. That’s great, but it will also cause some problems for the patient. Any patients will no longer be able to get their prescription supplies from the same firms as before once the initiative is enforced.

2.      Struggles to meet demand

It is inconvenient for patients who have relied on the same supplier for years. However, it is unlikely to be the most significant issue experienced during the transition. When the companies that are awarded the bid begin to struggle to meet demand, serious concerns will begin. These companies will experience a significant rise in patient volume, and service to the average patient is likely to suffer as they adjust to the rapidly increased customer base.

3.      A reduction in the margin

Another problem that these companies may face is reducing the margin they were likely obliged to take as part of the operation. Companies will now be forced to comply with increased demand at a lower price than was required to win the Medicare contract. When a company is forced to take a big hit to its margins, the average customer’s service suffers as a result.

As you can see, the case has both negatives and positives. The main advantage is future long-term cost savings for the Medicare system, which we undoubtedly need to achieve.


The major question is how much of a hit our service levels can suffer as medical supply companies face increased cost pressures. Only experience will say, but you can be sure that you can see these times in the coming years and that they will affect your everyday lives in some way. More reforms in the healthcare system, like nationalized healthcare supply marketplace will be discussed in future blogs.

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