Medicare Fraud

[leora]

You always hear that there's a lot of fraud in the medicare program, and I wondered, what is that concept based on? Is that true? So, I decided to do some quick research. I found this neat little page by the IRS with examples of healthcare fraud investigations for 2010 linkSome things you'll notice is that a lot of the examples involve fraud on the

Comments

[beth_leonard]

*nod*

And people have no incentive (usually) to call their insurance companies if they have insurance, or the government, if they're on medicare, to let them know that a service was billed for which they did not receive. It's just more paperwork, and there's nothing in it for them, so why bother?

I have been over-billed or mis-billed by El Camino Hospital **EVERY**SINGLE**TIME** I've been there. From things as simple as a $70 tetnus shot that I never received (I knew I didn't consent to any shots when I broke my tail bone because I was trying to get pregnant at the time and I'd had one just 3 years earlier) to them classifying Peter's ER visit as a "Level 3" (requires X-rays) when it was really a "Level 2" (anything more complicated than routine checking your blood pressure.) The difference in cost between those two procedures was over $800. If I had decent insurance with a deductible below $400, I never would have noticed the difference and never would have bothered to make the phone calls to bother to complain.

The incentives are all messed up with our current system.

The private health insurance companies at least have some profit incentive to double-check on some of the abuses. With their "in-network" doctors, they can see who is prescribing far more tests and procedures than average, and they can use their leverage to encourage that doctor to either be more reasonable, or get out of their network. The government medicare system has no such incentive because there is no profit motive. What's worse, the new health care legislation requires some unreasonable amount of premiums (like 85%) to be spent on "patient care", leaving only 15% for things like "overhead" and "paying your corporate income taxes." The problem is, the fraud detection unit counts as "overhead." This is one of those areas where I really think government should step out of how people run their businesses.

I've seen claims that Medicare has far less overhead than private insurance as a percent of dollars spent, but if you count fraudulent payments to doctors as "patient care" and a fraud detection unit as "overhead" you can inflate your numbers as much as you want.

My view on the world is certainly slanted to "There's a problem; government can make it worse." than "There's a problem; government can make it better."

--Beth

[akiko]

Because, clearly, the invisible hand in its benevolent wisdom will make it better.

[leora]

Well, the problem with private insurance is that while it's cheaper, then the patient gets screwed over. Medicare is more expensive, but it's better for actually getting help to people in medical need. I'd rather see some fraud and abuse and fewer people having to let their medical emergencies not get handled and having medical problems escalate because they can't afford to handle them even with private insurance.

But really, I think insurance should be run as non-profit charities. The fact that insurance companies are companies run for a profit is, I think, something fundamentally wrong with our society. At least for vital insurance services, as opposed to getting special extra things insured, which is fine to have be a luxury.

[beth_leonard]

I'd rather see some fraud and abuse

But why do we have to have the fraud and abuse? Why won't the government devote a reasonable portion of it's budget to detecting fraud and abuse?

Many of the fraudulent doctors probably justify their fraud to themselves as "Medicare doesn't reimburse me at the rate which is reasonable given my years of schooling to get to this position; they defraud me, I'll defraud them." Because Medicare doesn't pay what services cost, the doctors must shift those costs on to other private practice patients, increasing the expense of care for people with private insurance and further distorting the market.

I like the idea of medical insurance as not-for-profit businesses. I don't know what we're going to see in the world of the future. While I don't want it to have to be this way, I'd rather that we had two separate medical systems, one for private practice and one for government-distributed healthcare. Stop forcing individual doctors to shift the costs around. Something akin to the VA hospitals, but for non-vetrans. Allow the private system to heal itself without the weight of government-mandated care. Already many doctors have joined boutique medical groups which do not accept insurance or medicare. I expect that practice to grow in the future. Right now they only lack hospitals.

--Beth

[leora]

Well, I'd be fine with medicare spending more on fraud-prevention. I meant if we had to have one or the other, I'd take the current levels of fraud and abuse and the current levels of patient care, because I think it's worth it for the benefits we receive.

As to whether or not doctors are being payed as much as they "should be", that's subjective. Personally, I'd rather fix that problem by better subsidizing education, so we could have doctors chosen more by who wants to go into the field and is good at it, and have doctors start their practices with less debt. I honestly think part of the problem I'm facing right now with my doctor is she probably never really wanted to be a doctor, so much as she wanted a stable, decent-paying profession. That's a really bad thing for patients. I'm not saying I don't want doctors making a nice living, I do, but I don't think there is any inherent reason to say they are underpaid, except for the idea that they start off their practices with a ton of debt.

[beth_leonard]

Personally, I'd rather fix that problem by better subsidizing education

*nod* or, radically changing how educating doctors is done.

Yes, doctors need to know quite a lot about quite a lot of things, but the reality is that once they get into their speciality, they only need in-depth knowledge about one thing, and my OBGYN really doesn't need to have spent that long learning about toenail fungus. If I ask her about toenail fungus, she can refer me to someone qualified to help.

When something out of the ordinary daily drill comes up, doctors need to research things, consult with colleagues, and look things up just like the rest of us.

I majored in "General Engineering" because that was the degree offered at my school I took mechanical because it was required, knowing full well that I'd never ever want to be in a profession that required me to know the lever formula. Everything in that class went in one ear and out the other. If I ever did need to know something about levers and gears later in life, I'd ask someone who is an expert or buy a $70 text and read up on it because I know I don't know anything about them.

I think there's quite a lot of courses like that for doctors. Combined with the insane residency requirements and rotations -- the legal maximum residents are supposed to work is 80hrs/week, but every resident violates that every week by a long shot. There's a culture of abuse and I can't believe people stand for it.

Doing a residency and having an on-the-job learning experience from someone who is doing something you'd like to do, and doing supervised work for some time before working without review makes sense. Rotating through a few different areas before picking your final career makes sense. Spending as many years on it as they currently do is crazy.

I'm in favor of deregulating the industry, but I know that won't pass public muster, so in the very least, I think we should have different classes of license based on education and experience. Let doctors start earning money younger.

I don't think there is any inherent reason to say they are underpaid

I think part of it is that doctors can never hit the jackpot in their profession. With engineers working for a corporation, there's always the possibility that your company will make something wonderful that will take the mass market by storm, and your N years of work on that product will have 10,000*N sales. A lawyer has the opportunity of having a grand class-action lawsuit with a huge punitive payoff. Going into finance can be even more lucrative.

Medicine, by it's nature, doesn't have economies of scale. A doctor will never hit the jackpot and have a patient say "You saved my life!! I'm so grateful that I'm writing you into my will and my estate is all yours when I die!" I'm sure there would be laws against that even if it did happen. Doctors are just paid by the service, which is roughly paid by the hour. There's never a chance that one hour's work will net far more than one typical hour's pay. That means every hour has to count. They need essentially more per average hour to make up that compared to other professions persons of that intellect could go into which have the chance of huge bonuses.

Doctors also start off their practices much later in life than most other professions. It's not just the debt, but the exponential growth curve on saving for retirement that needs to be accounted for.

--Beth

[leora]

We do need to change the way we educate doctors. I think part of the problem is that it's actually a fairly modern problem. When my father was studying to become a doctor, he decided to become an internist, which was viewed as a specialty and going further than just your standard being a doctor. But now tons of doctors go into specialties and we have subspecialties from there. Part of this is that there is far more to know. Part of this is that we have far more effective medicine, which is great. But we probably do still keep a lot of the earlier stuff that was seen as stuff to teach to everyone. It would be better to review that and figure out which of it is really needed to understand how things work, and which of it is extra info they don't really have to have. It might make sense to make actual pre-med programs in undergrad to start off with the basic info they really need and then start teaching them how to be an internist or an endocrinologist or a gynecologist or so forth.

And yes, I would much prefer we not abuse doctors-in-training. On a scary note, my father mentioned that when he was in medical school, speed was a legal drug, and basically all of his classmates used it. It's a scary thing to think about a generation of doctors.

[leora]

Although one does have to be careful about not spending too much on fraud prevention. I'd be fine with it assuming an expected positive return-on-investment. I'm not actually positive medicare would get that. They're obviously catching some of that fraud, and the IRS appears to be catching some of it. And you do reach a point where you're spending a lot of money to catch the hard to reach small fraud, and that isn't worth it. But I'd be in favor of them trying to find the right balance in positive return on investment and not too many false positives.

[nella580]

LJ really needs a "like" button. Well said for all your points.