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peter cramton

Auction expert reacts to CMS’s proposed big changes

‘I get little comfort from knowing I was right’

COLLEGE PARK, Md. – When CMS outlined significant changes to its competitive bidding program in a recent proposed rule, one person came to mind: Peter Cramton.

How did we 'win' the mock auction?


I attended Professor Peter Cramton's "Mock Medicare Auction" on April 1 at the University of Maryland along with 122 other stakeholders from the industry, government, academia and the press. The purpose was to better understand how a free market auction designed by economic experts would work as a potential alternative to the current fundamentally flawed bidding program designed and implemented by Medicare. I was assigned to the Harry Truman & Co. team and was partnered with a Washington D.C. healthcare reporter. Even though both of us had limited knowledge in auction theory and design, we won the exercise as the most profitable company.

System practically guaranteed outcome


The design of Medicare's competitive bidding program all but guaranteed that the majority of mail order diabetes contracts would go to suppliers with very small market share in the product category, says economist Peter Cramton.