Perils of the Medical Care Bureaucracy.


The high cost of medical care is on the lips of every politician and draining the pocket-books of most Americans. After creating the Medicare/Medicaid monster, the government's expanded intervention into the medical care marketplace with the inaptly named Patient Protection and Affordable Care Act doubled the premiums and deductibles for both employer-sponsored and individual insurance. Piling on more laws, regulations, and agencies is not the answer.

Anonymity, complexity, and opacity invite shady behavior. Individuals, companies, and patients who defraud the massive Federal "health system" never would dream of lifting money from their patients' wallets or stealing from their doctors' cash drawer.

The government's track record does not bode well for imposing more bureaucracy to remedy a problem created by the layers of third-party payer bureaucracy. Waste, fraud, and abuse are so rampant that the government has a Medicare Strike Force to root out and recover lost Federal funds. Medicare fraud--about $60,000,000,000 in 2016 alone--is about 10% of Medicare's total payments. By contrast, the typical private business loses five percent of its revenues to fraud. However, since its inception in March 2007, the Medicare Strike Force has recouped less than $2,000,000,000 per year in misappropriated funds.

Medicare's $16,700,000,000 per year hospice program is fertile ground for the unscrupulous. Hospices are paid a fixed daily sum for each patient enrolled "regardless of the services provided." One amoral scheme recruits patients who unknowingly forgo curative treatment options by joining hospice. An Office of Inspector General (OIG) report revealed that, in 2012, hospices billed Medicare more than $250,000,000 for services to patients in long-term care or assisted-living residences who did not require hospice care, costing four times more than the appropriate level of care. Even worse, the OIG found that the quality of care suffered in 31% of programs. The bureaucratic morass allows the perpetrators to pocket the fixed fee and skimp on the services.

Further, the government cannot keep track of its program dollars. According to another OIG audit, in 2009, the Medicare Prescription Drug program paid $33,600,000 and hospice patients paid $3,800,000 for medications that should have been included in the hospice daily fee. Even after discovering the snafu, the problem got exponentially worse. In 2016, the government paid $160,800,000 for drugs that...

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