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The $272 billion swindle
Key Excerpts from Article on Website of The Economist
Posted: May 22nd, 2017
http://www.economist.com/news/united-states/21603078-why-thi...
Health care is a tempting target for thieves. Medicaid doles out $415 billion a year; Medicare (a federal scheme for the elderly), nearly $600 billion. Total health spending in America is a massive $2.7 trillion, or 17% of GDP. In 2012 Donald Berwick, a former head of the Centres for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of the RAND Corporation, estimated that fraud ... added as much as $98 billion, or roughly 10%, to annual Medicare and Medicaid spending - and up to $272 billion across the entire health system. Federal prosecutors had over 2,000 health-fraud probes open at the end of 2013. A Medicare strike force, which was formed in 2007, boasts of seven nationwide takedowns. In the latest, on May 13th, 90 people, including 16 doctors, were rounded up in six cities - more than half of them in Miami, the capital city of medical fraud. Punishments have grown tougher: last year the owner of a mental-health clinic got 30 years for false billing. Yet the sheer volume of transactions makes it easier for miscreants to hide: every day, for instance, Medicares contractors process 4.5m claims. In this context the $4.3 billion recovered by fraud-busters in 2013, though a record, looks paltry. Some criminals are switching from cocaine trafficking to prescription-drug fraud because the risk-adjusted rewards are higher. This is the medical worlds dirty secret, says John Holcomb of the Texas Medical Association. Everyone talks about it in the doctors lounge, but few complain.
Note: For more along these lines, see concise summaries of deeply revealing news articles on corporate corruption and health.
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