The great American health care rip-off

Kevin D. Williamson  ·  Jul 30, 2017

Ask a politician how he wants to balance the budget and, nine times out of ten, he’ll give you a politician’s answer: cutting “waste, fraud, and abuse.” Normally, the correct response to this is contempt and mockery: What drives federal spending isn’t office supplies walking out the back door with a rogue secretary at the Merit Systems Protection Board—what drives federal spending is Social Security, Medicare, and Medicaid.

And you know where there’s a lot of waste, fraud, and abuse? Social Security, Medicare, and Medicaid.

Identifying small-ball inefficiencies at obscure federal agencies would not do very much to get federal spending under control, but getting a grip on the shenanigans that plague the major entitlements—especially the health-care entitlements—could mean substantial savings, “substantial” here meaning hundreds of billions of dollars.

Medicare and Medicaid together account for about $1 trillion in federal spending annually, and estimates suggest that $1 out of ever $10 of that spending is fraud. Some estimates go much higher. We do not have a very good idea of exactly how extensive fraud in the system is, because the federal government has put a fair amount of effort into not knowing. According to Malcolm Sparrow, a Harvard professor of public management who studies medical fraud, the government’s approach long has been backward: “Basically, the audits they’re using on a random sample are nothing like fraud audits,” he told The Nation. “The difference between a fraud audit and a medical review audit — a medical review audit, you’re taking all the information as if it’s true and testing whether the medical judgment seems appropriate. You can use these techniques to see where judgments are unorthodox or payment rules have not been followed, but almost nothing in these methods tests whether the information you have is true.”

Which is to say, investigators are asking whether a certain treatment was in fact appropriate for what ails Mrs. Jones, not whether Mrs. Jones exists.

Read the rest at National Review