Auctions and Medicare

A NY Times op-ed suggests using an auction to save money on Medicare.

The White House budget director, Peter Orszag, has highlighted regional variations as a key source of overspending on health care. Such wasteful spending by Medicare and by private insurance could add up to as much as $700 billion a year — enough to provide insurance for everyone who doesn’t have it now.

To realize some of these savings, Medicare could use an approach called a reverse Dutch auction to set up competition for doctors in oversupplied regions.