Once left for dead, it now appears likely that the health legislation Majority Leader Harry Reid (D-NV) will introduce sometime this week will include a government run health insurance program. One of the biggest reasons leftists support a government run plan is because they believe government run programs, like Medicare, have lower administrative costs than private plans. First of all, as the Washington Post’s Robert Samuelson notes today, that is simply not true: on a per person basis Medicare actually has higher administrative costs than the private sector.
More importantly, the private sector does a much better job rooting out fraud and waste than the government does. Watch this 60 Minutes story from last night detailing how government run Medicare loses $60 billion in taxpayer in fraud every year:
In the story, Steve Kroft asks convicted Medicare fraudster “Tony” about the extent of the government’s anti-fraud efforts:
“Didn’t anybody in Medicare check to see if any of these charges were valid?” Kroft asked Tony.
“Sometimes they’ll do it. But by the time they did it, it was too late,” Tony said. “We’ve already made $300,000, $400,000, $500,000 on it. And then we will never send ‘em nothing back. And then at 30 days they’ll send an inspector to your office. And by that time…it’s all closed down.”
They would pay first and send an auditor later.
Kroft then talks to FBI agent Brian Waterman:
“There’s somethin’ I don’t understand. I mean, you’re saying essentially people just fill out the phony paperwork, they send a bill to Medicare and they pay it,” Kroft remarked to Brian Waterman.
“That’s why you have companies that can run for 60, 90 days, and bill for ridiculous things. Because there are very few checks and balances to even determine whether these things a, were medically necessary, b, were ever given, or c, even physically possible for a patient with the kind of conditions they have,” Waterman explained.
Kroft then talks to the bureaucrat in charge of stopping fraud, Kim Brandt, Medicare’s director of program integrity:
“Look, I’m sure that you’re aware of these problems. But it doesn’t seem like you’re doing a very good job. I don’t mean you personally, but I mean, the government. This is still like a huge problem, and getting worse, right?” Kroft asked.
“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. 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,” Brandt said.
About that there is little dispute: Medicare has just three field inspectors in all of South Florida to check up on thousands of questionable medical equipment companies.
“Clearly more auditing needs to be done and it needs to be done in real time,” Attorney General Eric Holder said.
In other words, Medicare needs to spend much much more on administrative costs if they are going to stop losing $60 billion in taxpayer money every year. And that is before President Obama signs legislation that will put 100 million more Americans into a government run plan.