HC Fraud Real Relief Valve for U.S.

Posted on January 30, 2012


Waste is a personal pet peeve of mine, so when I recently read Fast Company’s article “The $70 Billion Scam” my jaw hit the floor. Then I fumed.

In light of the upcoming primary election (Florida’s is tomorrow), I reflected on the past few years of politics. So much energy has been put into healthcare reform, even before the fateful March 23, 2010 PPACA legislation was passed. From a layman’s view, I see hospitals fearful, wondering what the economic landscape will be like for them in the next year or five.  Many are paralyzed until the complexity of the legislation is digested still, nearly two years later. Doctors are running for the shelter of hospitals, who are financially overburdened. Medicare and Medicaid reimbursables are being pinched, threats abound on other cuts. The rules of engagement are changing as the fee-for-service model evolves to fee-for-outcome (quality). Rural providers are still wondering whether Uncle Sam will provide for their continued existence as they try to keep up to speed with expensive technology mandates and dwindling patient populations. Insurance costs are expanding, people are tired of paying more, customer service needs a lot of attention in healthcare. Work and expertise is still very siloed within care.

And then to learn that a scam on the magnitude of $70 billion or more (no one even knows the scope of the problem because it has not been adequately studied) has been growing like a weed unchecked for the past two dozen years at least—well, frankly, it is sickening. Yes, the waste is sickening. Yes, it is sickening to know people are getting rich off taxpayers and a government so bloated and inept it cannot track and account for such stealing. However, it is most disturbing on two equally terrific levels:  1) Politicians are not willing to fight this fight.  They would rather let a fire hydrant shoot straight into the air and complain there is no water.  2) The political posturing and hand-wringing of the past decade plus does not need to happen if the corruption is kept in check.  Note well:  I am sad and embarrassed that my state of residence, Florida, appears to harbor the most expert violators.

Amazingly, it does not even need to be stopped completely, just minimized to something in the order of what a normal company would accept.  The article notes credit card companies live with 1% fraud.  Our government accepts 10% for Medicare fraud (!), but it could be as high as 30%—no one knows!  As was stated in the article:

“We’d easily find $200 billion over 10 years. That means you wouldn’t need to cut reimbursement rates for providers. You wouldn’t need to restrict insurance coverage. You wouldn’t have to increase deductibles. Getting hold of this problem is a much healthier way of dealing with the cost control imperative than through indiscriminate cutbacks.”

No healthcare jobs need to be lost, no reimbursables cut, no facility improvements indefinitely delayed.

One of the most comprehensive articles on the ineffectiveness of government to run practically anything was published a few years ago in the Wall Street Journal by John Steele Gordon:  “Why Government Can’t Run a Business”.  Every time I hear the government attempting to extend its…reach into things I am pretty sure it has no need to get involved in, I remember the points from this article.  Here are Mr. Gordon’s seven:

  1. Governments are run by politicians, not businessmen.
  2. Politicians need headlines.
  3. Governments use other people’s money.
  4. Government does not tolerate competition.
  5. Government enterprises are almost always monopolies and thus do not face competition at all.
  6. Successful corporations are run by benevolent despots.
  7. Government is regulated by government.

You can easily see which ones have relevance in the healthcare fraud debate.

I am not banging a political drum so much as placing a call to action to stop this waste and make everyone else’s lives better. Occupy Wall Street:  the real issue is our own government’s lack of oversight.

Americans complain so much about government regulation, but when regulation could really help (internally, as in monitoring and tracking fraud) it is nowhere to be found. Why would the government work so hard through the IRS to triple its audit team to catch a few thousand dollars here and there, when the real graft is on a much more pervasive scale, with numbers that actually matter?  Why can’t some presidential candidate run with this platform?  You would get my vote.