When you work in Washington (and assuming you haven’t been corrupted), you run the risk of being endlessly outraged about all the waste.
But not all waste is created equal. Some examples are so absurd that they deserve special attention.
- Forcing taxpayers to pay millions of dollars for pro-Obamacare and pro-IRS propaganda.
- Doing interviews – at a per-person cost of $6,000 – about erectile dysfunction and sticking the tab on us.
- Hiring bureaucrats to monitor school lunches and replace healthy turkey sandwiches with processed chicken nuggets.
- Giving disability benefits to a grown man who wants to wear diapers and live as an “adult baby.”
- Squandering $400K on experimental underwear that detect cigarette smoke.
- Paying 35 times the market price for some Kindles.
- Throwing $100 million in the garbage by subsidizing a leftist bureaucracy in Paris that advocates for higher taxes in the United States.
We now have another example to add to the list. Russian diplomats have been busted for bilking the Medicaid program of more than $1 million.
This is so outrageous that it may actually be the impetus for some desperately needed reform, as I suggest in this interview with Neil Cavuto.
But is fraud really a problem? Defenders of the Medicaid entitlement presumably would like us to think that this latest story is just an anomaly.
That would be nice, but the experts who have looked at the issue have come to a much different conclusion.
While food stamp fraud is significant, especially with a record-high 47 million Americans now on food stamps, it pales in comparison to what is stolen from Medicare and Medicaid. …It is widely accepted across the political spectrum that upwards of $100 billion of that amount is fraud and abuse. Recently, a report from the Oversight and Government Reform Committee in the US House of Representatives outlined many billions of dollars being wasted every year just in New York’s Medicaid program. Grossly inflated payments to intermediate care facilities and excessive salaries were just the tip of the iceberg in a $53 billion program that easily bleeds more than $10 billion annually to criminals.
So what’s the best way of dealing with the Medicaid mess? Fortunately, we have a simple answer. As I mentioned in the interview, the entire program should be block granted and turned over to the states.
That doesn’t automatically eliminate fraud, but it does create much better incentives for sound governance since state taxpayers would be the ones picking up the tab if a state program is riddled with fraud. Under the current system, by contrast, the cost of waste and malfeasance is spread among taxpayers from all 50 states.
This video from the Center for Freedom and Prosperity explains how block grants would work.
One final point to emphasize is that fraud reduction is really just a fringe benefit if we reform Medicaid.
The main reasons to decentralize the program are fiscal sanity and better health care policy.
But the one common thread is that third-party payer facilitates problems, whether we’re looking at excessive costs, health inefficiency, or rampant fraud.
P.S. Don’t forget the other two big entitlements that need reform, Social Security and Medicare. Like Medicaid, Medicare has major challenges with fraud. From what I understand, the retirement portion of Social Security doesn’t have major fraud issues, but the disability program is a huge problem.
[…] That certainly would produce better long-run outcomes than a one-size-fits-all Washington entitlement. […]
[…] good idea to fix budget problems at the state level and to fix budget problems in Washington. And reduce fraud as […]
[…] good idea to fix budget problems at the state level and to fix budget problems in Washington. And reduce fraud as […]
[…] Medicaid is an obvious example, along with food stamps. Especially since both programs are riddled with […]
[…] Medicaid is an obvious example, along with food stamps. Especially since both programs are riddled with […]
[…] previously written about widespread fraud affecting programs such as Medicare, Medicaid, food stamps, welfare, disability, and the earned income […]
[…] previously written about widespread fraud affecting programs such as Medicare, Medicaid, food stamps, welfare, disability, and the earned income […]
[…] variety, there’s also plenty of the latter form of corruption in programs such as Medicare, Medicaid, welfare, job training, food stamps, disability, […]
[…] written about this before (including how foreigners are bilking the system). But here are some fresh details from […]
[…] Unsurprisingly, as is so often the case with redistribution programs, there’s rampant fraud with the EITC and other refundable tax […]
[…] written about this before (including how foreigners are bilking the system). But here are some fresh details from […]
[…] written about this before (including how foreigners are bilking the system). But here are some fresh details from […]
[…] instance, on the programmatic level, we can enlist the private sector to fight rampant Medicare and Medicaid fraud by allowing private investigators to keep a slice of any recovered […]
[…] instance, on the programmatic level, we can enlist the private sector to fight rampant Medicare and Medicaid fraud by allowing private investigators to keep a slice of any recovered […]
[…] program. There’s fraud in the EITC program. There’s fraud in food stamps. There’s fraud in Medicaid. There’s fraud in the disability program. There’s welfare […]
To whoever is hiding behind the pseudonym “smapple”:
.
> “I showed our technology to the FBI at one point, and was told they could not use it because of the Graham Leach Blyley act rules that state the government cannot have private citizens’ data.”
.
The “government can’t have private citizens’ data” — did you write that with a straight face, or were you laughing hysterically, only able to type a few words at a time in between overwhelming bouts of rolling-on-the-floor mirth?
You should start auditioning at comedy clubs — this statement is sure-fire to laugh the house down.
More seriously, that is the single unintentionally funniest line I’ve seen on the World Wide Web in a long, long time.
[…] Yes, the fact that there are no actual cuts is a problem with that argument. But the second problem with the left’s argument is that Medicaid doesn’t seem to have any effect on health outcomes. So if Republicans actually did cut the program, it’s unclear how anybody would suffer (other than the fraudsters who bilk the program). […]
[…] On that issue, my “favorite” example of Medicaid fraud was perpetrated by Russian diplomats. […]
[…] On that issue, my “favorite” example of Medicaid fraud was perpetrated by Russian diplomats. […]
[…] On that issue, my “favorite” example of Medicaid fraud was perpetrated by Russian diplomats. […]
[…] Medicaid fraud. […]
[…] P.P.P.S. Regardless, one would hope all politicians would agree that it’s time to tackle rampant Medicaid fraud. […]
[…] P.P.P.S. Regardless, one would hope all politicians would agree that it’s time to tackle rampant Medicaid fraud. […]
[…] written about this before (including how foreigners are bilking the system). But here are some fresh details from […]
[…] such as hospitals will lobby fiercely to maintain the status quo (after all what’s is waste and fraud to us is money in the bank for them). Trump would have to be willing to push back and make a populist […]
[…] written about this before (including how foreigners are bilking the system). But here are some fresh details from […]
[…] I guess we shouldn’t be surprised. There’s lots of Medicare fraud, Medicaid fraud, Food Stamps fraud, and disability fraud, so this just seems to be an inevitable additional cost […]
[…] Mr. Milbank can start investigating other examples of fraud, starting with Medicaid and the disability […]
[…] variety, there’s also plenty of the latter form of corruption in programs such as Medicare, Medicaid, welfare, job training, food stamps, disability, […]
[…] variety, there’s also plenty of the latter form of corruption in programs such as Medicare, Medicaid, welfare, job training, food stamps, disability, […]
Something of the order of five trillion $ is collected from the American people by their government(s). But a lot of it comes disproportionately from the hated rich. So say medical programs waste one hundred billion, and all government program waste fraud and abuse adds up to even a whole trillion. I still get four trillion in mostly redistributed money. Yes, I know, government spending is inefficient by nature and lack of incentives, so lets be pessimistic and say the four trillion provide only two trillion worth of real services. Given the fact that the money comes disproportionately from the hated rich, two trillion is still better than nothing, regardless of waste, fraud, abuse and inefficiency. Isn’t it?
So while we should all strive to eliminate waste, fraud and abuse, and increase efficiency, still, two trillion, which is mostly some hated group’s money, is not a bad deal. Our government gives us the power to do it, so lets do it, “yes we can!”
And if we can double the five trillion collected to ten trillion, then the money that reaches the people, the majority of people, still doubles to, say, four trillion despite all the fraud, waste, abuse and inefficiency.
In the end, if waste fraud and abuse is an inevitable byproduct of redistribution, then lets just accept it and move on with it. The money that still reaches our pockets after waste, fraud and abuse, is significant, and still better than nothing.
Dan- you do not realize how right you are. One of my previous jobs was fraud detection. We used very advanced algorithms and data mining tools to detect recurring patterns in medical claims. By identifying good patterns, we were able to spot the bad ones. I once had the data to prove that there is more than 30% fraud in Medicaid/ Medicare. When John Sharpe was Comptroller for the state of Texas he took this on, and showed the savings. Problem is getting somebody to actually go after it. In order to go after it, you had to pay lawyers to take somebody to court. Sometimes those costs outweighed the total amount of the fraud. Interestingly we found the same level of fraud to exist in automotive warranty claims, and any other system where a third party pays for something a recipient receives from an outside contractor.
I showed our technology to the FBI at one point, and was told they could not use it because of the Graham Leach Blyley act rules that state the government cannot have private citizens’ data. So, the FBi is stuck to counting on whistle-blowers. I find this all interesting now that the government is willing to share my healthcare data with ANY and ALL other institutions for the purpose of making their health care control act work.
Regardless of the government entity managing Medicaid, socialized medicine will be inefficient.
A better solution would be to eliminate the tax deduction for health payments and eliminate all means-tested health programs. The money saved should be redistributed to all citizens, to be placed in individual Medical Savings Accounts.
For example, if a single adult received $3,000, that would replace the tax deduction on a $12,000 insurance with a 25% flat tax. The individual would be free to purchase more or less insurance and would still have the first $3,000 paid out of the MSA.
For a period of time there would be those with pre-existing conditions that would have to be accommodated, but as time goes on all conditions that existed prior to MSA payments would disappear.
Those that elected not to buy insurance would be liable for all medical bills out of saved MSA accumulations and personal assets.
Why not push it down to City/County Level.?
In the city of Tyler, Texas and the surrounding Smith County, a semi-urban zone in East Texas with some 120K residents, zero public debt (apart from the school district, which is upgrading/replacing 75 year old facilities) they have a novel solution.
Local Hospitals, Businesses, and Civic Groups have formed a local, preventative care clinic, with volunteer doctors, nurses, dentists, optometrists, donated equipment, and a church donated building.
It has small $5 to $25 co-pays for all services and is open to anyone who can bring in and show a wage/earnings statement for the past six weeks, to prove they are gainfully employed. They have services six days a week, and extended clinic hours up until 9:00 PM in the evening most days.
You can receive preventive care, women’s health services, cancer screenings, X-Rays, dental cleaning and routine repair work, reduced cost prescriptions, etc.
The also sold, until the ACA, catastrophic healthcare plans. Empirical evidence showed a sharp decrease among the working poor utilizing Emergency Room services needlessly, so the major non-profit hospital systems foot a large chunk of the bill, because it reduces cost.
And it does it without a nickel of tax payer money.
Imagine what this community could do for the Medicaid/Medicare patients with a block grant covering 80% the estimated $1 Billion in services provided under Medicare/Medicaid services administered under CMS, not to mention the funds allocated to hit the residents in this community with the ACA?
There’s a 20% savings in entitlement programs I think we could all live with, and would go a long way, if replicated across the country, in eliminating fraud and reducing red tape in the process.