Government option is already a miserable failure
By Deroy Murdock
As the Senate weighs a 2,074-page health care "reform" bill, supporters of a government option for medical coverage consider this the finest federal initiative since the Emancipation Proclamation. Yet today's headlines show government severely bungling its current health care duties. Expanding Uncle Sam's medical portfolio is a prescription for fraud, fiscal incompetence and rampant mismanagement on the clinical frontlines. Fraud devours some $60 billion - or 13.3 percent - of Medicare's $452 billion budget. "Rather than stealing $100,000 or $200,000," federal prosecutor Kirk Ogrosky said on the Oct. 25 edition of "60 Minutes," criminals "can steal $100 million."
One thief named "Tony" told CBS's Steve Kroft that he robbed $20 million from Medicare. It was "real easy," Tony said. "It was like taking candy from a baby." He registered bogus medical companies, bought stolen doctor and patient ID numbers, and then billed Medicare for phantom wheelchairs, phony artificial limbs and more. Medicare soon delivered $20,000 to $40,000 electronically into Tony's bank account - daily.
Sen. Charles E. Grassley, Iowa Republican, recently found that Medicare administrators received 30 serious fraud warnings over three years, primarily during the Bush administration, and simply ignored half of them. Medicare failed to investigate complaints that it reimbursed one company for injected drugs "at doses that were not medically feasible," one letter explained. Rather than the proper $74 per dose, Medicare sent this provider $4,464.
Another recent report uncovered $18.1 billion in improper Medicaid payments, or 9.6 percent of that program's claims. Lacking the "evil and greedy" private insurers' profit motive, government managers have no incentive to uproot such malfeasance.
Meanwhile, doctors routinely wait and wait to get paid less and less by Medicaid. According to Athena Health's PayerView report, North Carolina is the fastest state Medicaid system, paying doctors in 40.6 days. Still, it lags Coventry Health Care, the eighth-fastest national payer it measured, needing 38.5 days to issue checks. (Medicare Part B was ranked fifth at 33.4 days.) Among 14 Medicaid systems that Athena rated, six take 77.7 to 89.7 days to pay. Medicaid of New York is the biggest deadbeat, averaging 160.9 days (or nearly six months) before whipping out its checkbook.
Medicaid systems also reject claims more than do private insurers. While Humana, the No. 1-ranked national payer, has a 5.3 percent denial rate, No. 7 Medicare Part B spurns 8.7 percent of claims. Among Medicaid systems, No. 1 Illinois denies 9.1 percent of its claims. Medicaid of California's refusal rate is 19.5 percent, while No. 12 New York's is 34.1 percent. Fourteenth-rated Florida denies 38.8 percent of Medicaid claims.
Government reimbursements also trail inflation. In 1997, Medicare paid general surgeons $574 for each complex hemorrhoidectomy. In 2008, that procedure paid $390. This is barely half the $770 needed to equal inflation.
"Physicians feel that increased government intervention in health care will force them to be even more indentured to Medicaid and Medicare which perpetually appear to be on the verge of collapse," says Dr. Soumi Eachempati, associate professor of Surgery and Public Health at Manhattan's Weill Cornell Medical College.
The government option currently impedes distribution of the swine-flu vaccine. Washington has injected little more than confusion into this situation. According to early promises, 120 million doses were to be deployed by mid-October. Now, only 30 million doses will be on hand.
"I think we led expectations of availability to be higher than they have been," Assistant Surgeon General Anne Schuchat told the Senate Homeland Security Committee recently. "That, I think, can lead to frustration."
Sen. Susan Collins, Maine Republican, scolded Health and Human Services Secretary Kathleen Sebelius for offering senators "generalizations and non-answers" on this vital matter.
The government option in medicine speeds taxpayer dollars into the hands of crooks, stalls payments to honest doctors, and stymies Americans desperate for swine-flu shots. Imagine how much more the government option could accomplish with a trillion dollars and an appetite for one-sixth of the U.S. economy.
Deroy Murdock is a nationally syndicated columnist and a media fellow with the Hoover Institution at Stanford University.
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