In the latest step for his “We Can’t Wait” executive-authority initiative, President Obama is targeting “waste, fraud and abuse” in Medicare and Medicaid in an attempt to cut spending and woo voters.
The White House is launching pilot programs intended to further cut waste and fraud in the giant Medicare and Medicaid entitlement programs. The Health and Human Services Department will oversee the changes, such as testing changes to outdated hospital billing systems to prevent overbilling, administration officials said ahead of a formal announcement.
To show that its broad campaign to cut government waste is working, the White House says the administration cut improper payments by nearly $18 billion in 2011, largely in such programs as Medicare, Medicaid, Pell Grants and food stamps.
Make no mistake: there are serious problems with fraud in these two government programs, and kudos to the Obama Administration for attempting to tackle them. But the large budgetary problems facing the health entitlement programs have less to do with fraud and more to do with the fundamental structure of the programs. Their defined benefits are too large. They offer benefits to too many people. Too many people think that eliminating “waste, fraud and abuse” from government entitlement programs will make them sustainable. It won’t.
Good for the Obama Administration for tackling what is a serious problem. It shouldn’t distract, however, from the fundamental mission of entitlement reform. Obamacare took minor steps towards benefit reform in Medicare, but also exacerbated the problem that Medicaid places on both federal and state budgets.
For a good rundown on how susceptible Medicare is to fraud, take a look at this 60 Minutes piece.