“Government fraud has been in the news lately because analysts are expecting major abuses of the Obama administration’s $787 billion stimulus plan. One Deloitte expert argued that “swindlers, con men, and thieves could siphon off as much as $50 billion” of stimulus funds, which are vulnerable because policymakers are under pressure to shovel it out the door quickly.
Even more troubling is the potential for fraud and abuse created by President Obama’s other big spending proposals — particularly his giant health-care plan. Obama wants to inject hundreds of billions more tax dollars into federal health care instead of fundamentally reforming Medicare and Medicaid — broken programs that are already subject to Madoff-sized larceny. That is incredibly unfair to those of us paying the bills. . . .
Take Medicare. The Government Accountability Office reports that the program makes about $17 billion in improper payments each year. And that doesn’t include problems in the new $60-billion-per-year prescription-drug plan, which is a juicy target for criminals. Harvard University’s Malcolm Sparrow, a specialist in health-care fraud, recently testified to Congress that official estimates are “lacking in rigor,” are “comfortingly low and quite misleading,” and exclude many kinds of fraud and abuse. He thinks that as much as 20 percent of the federal health-care budget is consumed by fraud, which would be $85 billion a year for Medicare.
Medicare makes a staggering 1.2 billion electronic payments each year, making it highly vulnerable to cheating by health-care providers and organized-crime rings. Criminals need only fill out the government forms carefully and the “claims will be paid in full and on time, without a hiccup, by a computer, and with no human involvement at all,” according to Sparrow. A perfect example is the recent case of a high-school dropout in Miami who was able to single-handedly bilk Medicare out of $105 million from her laptop by submitting 140,000 separate claims for equipment and services.
Medicaid is also a huge abuse target. The GAO puts Medicaid fraud at $33 billion — 11 percent of state and federal spending on the program. . .”
“Here's a blow to President Obama and Democrats pressing health care reform.
One of the main arguments made by the President and others for investing in health reform now is that it will save the federal government money in the long run by containing costs.
Turns out that may not be the case, according to Doug Elmendorf, director of the nonpartisan Congressional Budget Office.
Answering questions from Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today, Elmendorf said CBO does not see health care cost savings in either of the partisan Democratic bills currently in Congress.
Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?
Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs. “