MEDICAID IS AN INVITATION TO FRAUD

In a remarkable series last week, The New York Times cited some mind-boggling numbers: As much as $18 billion a year is vanishing, thanks to Medicaid fraud, waste and abuse. How could this happen? No one's minding the till, says the Times. The number of fraud investigators nose-dived, even as the program ballooned. And it's tragic, because tough enforcement can pay for itself.

But here's what the Times forgets: Policing might cost less than corruption and waste — but it still costs something. This is not an argument against enforcement. But it's a reminder that this kind of cash drain, and the need to plug it, is unavoidable in subsidy programs — i.e., anytime someone receives services and someone else (like taxpayers) pays the tab. Why is that?

Take Medicaid: Party A, the health-care provider, delivers services to Party B, the Medicaid patient. But it is Party C — you, the taxpayer — who gets the bill. If public officials don't check that doctors and nursing homes and speech therapists really are delivering services they're billing for, that patients truly need the services, that services are delivered efficiently, taxpayers will get taken. Count on it.

But this is a tall task for a bureaucracy. And expensive. The best way to make sure services are delivered efficiently — and to only those who truly need them? Have patients pay their own way. After all, they are the ones who can best decide if the "product" is worth the price. Plus, folks who are ripped off can be counted on to ID crooks — instead of relying on elaborate computer systems, "referrals" by Department of Health bureaucrats and armies of investigators in prosecutors' Medicaid-fraud units.

Meanwhile, the $18 billion the Times cites may barely scratch the surface. After all, who's to say what counts as fraud and waste? (Some might consider all $45 billion spent on Medicaid in New York a "waste.")

Surely, a dentist who bills for 991 procedures in one day, as Dr. Dolly Rosen allegedly did, is a crook. But what about the doctor, or patient, who orders up questionable tests or treatments just because they're "free"? What about elderly folks who legally hide savings and bill taxpayers for long-term care? Or hospitals that are kept open, though they never fill up their beds? How about folks who choose not to exercise or cut down on fatty foods, but gladly accept coverage for heart disease?

Of course, few Americans might deem some of these practices "fraud" or even "waste." But surely costs would be a lot lower if patients had to write out the checks themselves. This is true of Medicaid as well as regular health insurance: When someone else ponies up, patients are sure to consume more. And why not have every little ache or pain checked — if it's on someone else's dime? Why not order the most elaborate tests, the priciest therapies?

I once twisted my ankle playing basketball. No big deal, I knew from a lifetime of twisted ankles. Still, the doctor prescribed an MRI, just to be sure; insurance would pay. I couldn't do it. I couldn't bring myself to waste that kind of cash, even if it wasn't mine. But many folks could — even as they'd surely call the doctor nuts if he ordered the $1,000 test at their expense.

No, the fact that waste and fraud are unavoidable doesn't mean Medicaid should be scrapped. America takes care of its truly sick when they can't take care of themselves. But it's a strong argument for keeping the program narrowly confined to those who truly need it and to services that are absolutely critical. In Gotham, one of every three residents is on Medicaid. Fraud? Waste? You decide.

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WHERE SOCIALIST HEALTHCARE ENDS UP


'Value to the system' determined healthcare for communist East Germany's elderly

Under the communist regime in East Germany, elderly patients' healthcare depended on whether they could contribute to the workforce, says a letter in this week's BMJ. While those working and therefore judged "valuable to the system" could access medical treatment when needed, retired patients were considered a "drain on the public purse" says Dr Herbert Nehrlich, an East German doctor now living in Australia. X-rays and other diagnostic tests were denied people of a certain age, and retired East Germans were not hindered from travelling to the West, or staying there, he adds.

Conversely East German workers benefited from programmes to maintain and improve fitness including subsidies for sports, and breaks during the working day for sporting activities. Health inequalities between East and West Germany should be ironed out over time, says Dr Nehrlich, although higher drinking levels in the East were "not discouraged under the communist regime" and remain a problem for those living there now.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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