Millions of Americans with respiratory diseases have relied on oxygen equipment, delivered to their homes, to help them breathe. A basic setup, deliveries of small oxygen tanks for three years, can be bought from pharmacies and other retailers for as little as $3,500, or about $100 a month.
Unless, that is, the buyer is Medicare, the government healthcare program for older Americans.
Despite enormous buying power, Medicare pays far more. Rather than buy oxygen equipment outright, Medicare rents it for 36 months before patients take ownership, and pays for services that critics say are often unnecessary.
The total cost to taxpayers and patients is up to $8,280, or more than double what somebody might spend at a drugstore.
The high expense of oxygen equipment - which cost Medicare over $1.8 billion last year - is hardly an anomaly.
Medicare spends billions of dollars each year on products and services that are available at far lower prices from retail pharmacies and online stores, according to an analysis of federal data by The New York Times. A comparison of Medicare figures with retail catalogs reveals dozens of instances of the program's paying above-market costs.
These widespread price discrepancies, including those for oxygen services, have been noted in dozens of regulatory reports.
But when officials and politicians have tried to cut these costs, they have often encountered a powerful foe: the companies that sell these devices, who ask their elderly customers to serve, in effect, as unpaid lobbyists, calling and writing to their representatives in Congress, and protesting at rallies.
