You will recall two days ago the market noise that Resmed was about to be picked up by German Linde. We blogged about it here.

Now CNBC’s Jim Cramer talked about them benefiting from the potential reversal or low impact of competitive bidding. (I don’t think competitive bidding will be substantially reversed just to be clear.

Jim Cramer goes on to issue a potential target price of $53 which is a cool 30% premium.

The program officially started today, with all the competing and conflicting flavors of a bitter sweet chocolate. Despite a last minute lobbying effort - and one missing vote, at least 3 failed lawsuits - the program started.

“Industry” is saying that there is still a chance it will be reversed (temporarily) however that’s a long shot.

I used quotes when using the word “industry” because - industry was late to the party in presenting a united front and in the later stages “industry” unraveled somewhat when companies awarded contracts protested about delays to implementing the program, as well as arguments over higher and lower spec products being included (see Scooter Store) etc. The approach was also somewhat un-imaginative with the usual “lots of companies will go out of business, we provide services that cannot be obtained elsewhere etc.. to which the opposition cried the free market ethic, “If you cannot compete you deserve to go out of business”… and so on.

The main issue of course was an industry that did not recognize the seriousness of needing to provide cost savings to one of their biggest customers - namely Medicare.

There is no doubt in my mind that serious companies have been making contingency plans for this eventuality, and it is these that will ultimately win, as they had the vision to succeed - no matter what.

For all others, with all sincerity - go read “Who moved My Cheese“.

(You may be interested in our take on the NYT post a few days ago.

The story and the argument is not particularly new. What is somewhat new is the direct and stern criticism leveled directly at certain companies that the New York Times allege directly benefit from this delay. They name Invacare, Pride, Praxair and the Scooter Store and criticize Invacare’s Cara Bachenheimer who they allege does not want to see any substantive changes to the current system.

At the hub of the issue is the fact that consumers can purchase (according to the Times) – for example – a walker on the internet for about half the price of what national insurer Medicare (and therefore (directly / indirectly) the tax payer) pays.

It is true that in several cases the internet price of products is less expensive than the Medicare price. It is also true that the internet does not particularly serve well 90 year olds with Alzheimer’s or other incapacitating conditions who have no idea how to use the internet.

Unfortunately there have been documented cases of Medicare issues which have not helped the industry. Although it has changed somewhat, the industry has also not been able to get its act together in terms of a plan that makes sense to all. This continues today in some cases for example with the Scooter Store recommending that even higher specified products should be part of the competitive bidding process. Much to the chagrin of several industry stalwarts.

Adversity has made for strange bed fellows and time will tell if the new industry initiative will prove effective.

(In an unrelated event, Dan Meuser, President of Pride and former Republican candidate, will be hosting a Sen. John McCain lunch on July 23).

Update:

New York Times Opinion piece continues the onslaught “Medicare Savings vs The Lobbyists” - perhaps in part referring to the disclosure of a major homecare company spending $230,000 on lobbying in Q1.

If you would like to see our related post referring to the Office of the Inspector General and their report it is here - Pricing vs Reimbursement In The Homecare Industry - And The Competitive Bidding Solution

And a quick rebuttal from AAHomecare which actually is a little challenged in terms of winning this fight. You decide.

According to a recent article in Forbes this may well be the case. The argument is that as a result of highly differentiated healthcare delivery not perhaps providing the value added clinical and economic benefits - patients may have to turn to a more generic (and effective?) form of healthcare delivery.

While this story is mainly about pharmaceuticals it may well apply to homecare products as is evidenced by NCART - National Coalition For Assistive And Rehab Technology and others actively campaigning to have complex rehab products excluded from the National Competitive Bidding program.