Last Friday, I wrote an
article on the main site exploring the issue of rampant
Medicare fraud, noting that the problem undermines liberals'
arguments that we need a new government-run plan to bring more
efficiency to the system. Last night, "60 Minutes"
took up the issue, and if you haven't seen the stunning
report, I urge you to watch the video below and pass it along to
all of your friends. After investigating the matter, even CBS
acknowledged that it raised "troubling questions about our
government's ability to manage a medical bureaucracy."
For the story, Steve Kroft traveled down to South Florida, where
the Medicare fraud industry has become bigger than the drug
trade, and visited a number of so-called clinics that billed
millions of dollars to Medicare but were actually empty store
fronts. He interviewed a Medicare cheat who stole $20 million
from the government before getting caught, who described it as
being so easy to steal that it was like "taking candy from a
baby." And the show also visited with an elderly woman who in
2003 discovered phony health care charges being paid out in her
name by the federal government. Even though she has been
reporting these recurring charges to the Centers for Medicare and
Medicaid Services for the past 6 years, no action has been taken
by the government to stop the fraudulent payments.
The most relevant moment to our current health care debate came
when Kroft asked Kim Brandt, Medicare's director of program
integrity, to explain why the government couldn't do anything to
prevent the widespread fraud.
"Well, it really does come down to the size and scope of the
Medicare program, and the resources that are dedicated to
oversight and anti fraud work," Brandt said. "One of our biggest
challenges has been that we have a program that pays out over a
billion claims a year, over $430 billion, and our oversight
budget has been extremely limited."
Liberals keep touting Medicare's low administrative costs
relative to the private sector. To start with, those estimates
exclude a number of costs that show up elsewhere in the federal
budget (office rent, staff salaries, the cost of raising capital
through tax collection). But to the extent that the program
does have lower administrative costs, the result is far more
fraud than exists in the private sector, which is more aggressive
about policing claims. Estimates of the amount stolen from the
government each year vary from about $60 billion to several
hundred billion if you include Medicaid.
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