In a recent column, Mark Weisbrot chastised private insurers as “the biggest source of waste” in the U.S. healthcare system (“Pro: Health care law is a hopeful step forward,” Dec. 30). The facts suggest otherwise.
In 2010, fraudulent or otherwise improper Medicare payments totaled $48 billion, according to the Government Accountability Office. That’s quadruple the combined profits of the 10 largest health insurance companies — and represents nearly 10 percent of what Medicare spent that year.
At the same time, Medicare and Medicaid underpay legitimate healthcare providers by as much as 20 percent. To compensate, hospitals and doctors charge patients with private insurance more. In fact, the average family pays an extra $1,500 in premiums annually thanks to such federally induced cost shifting.
Janet Trautwein
Executive Vice President and CEO
National Association of Health Underwriters
Washington, D.C.
Comments (5)
Add commentWhere does that $48 billion figure come from?
Healthcare is a complicated issue. Not one that should be given to simple statements like this letter. Standing out in this letter is the implication that 48 billion is from "fraudulent" payments.
That is a nice number from a lobbyist. Where does it come from and what does it mean? Improper billing means a lot of things, improper coding, illegible writing, procedures not covered, etc...
Here is the source...from the GAO. http://www.gao.gov/new.items/d11430t.pdf . Interestingly enough, the word "fraudulent" is not used in the report. "Fraud" is used three times, once in the statement "CMS’s oversight of Part D plan sponsors’ programs to deter fraud and abuse has been limited" and twice in how to report fraud.
"An improper payment is any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements.
This definition includes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except where authorized by law), and any payment that does not account for credit for applicable discounts."
Not really fraud as the letter writer implies. The program itself is about $509 billion and covers 47 million people. That is about $11,000 each. I pay about $12,000 for my health care.
According to the Kaiser Foundation, the average cost for health coverage is about $15,000. http://www.kff.org/insurance/092311nr.cfm .
So why does Medicare, with all of its "fraudulent or otherwise improper" payments cover 47 million people for less per person than the average plan? Maybe it is because private coverage has something called "profit" in its goals? A 40% profit margin is good, and that is the difference between the two.
Where to start?
First off, it should set off warning signals in your head when you see a letter from an industry hack. The National Association of Health Underwriters is an organization representing the health insurance industry.
Second, Ms. Trautwein lied pretty boldly here. Let's look at what the GAO report says about that $48 billion figure:
"The improper payment estimate includes both overpayments and underpayments. [...] It is important to recognize that the $48 billion is not an estimate of fraud in Medicare."
http://www.gao.gov/new.items/d11842t.pdf
Doesn't look like fraud is part of that $48 billion after all, and it seems that most of these errors are clerical, which the health industry as a whole is notorious for. Maybe Ms. Trautwein made a clerical error in her letter.
Third, though there really aren't any good figures on Medicare fraud (so if someone states how much Medicare fraud there is, that should also set off alarm bells), it probably has the same rate of fraud as private insurance.
http://www.politifact.com/truth-o-meter/statements/2009/aug/27/tom-cobur...
Fourth, the U.S. pays more for healthcare than any other industrialized nation. To say that high insurance premiums are a result of "cost-shifting" from Medicare is complete BS, and sounds more like something an industry might say if it wanted a piece of that revenue itself.
And fifth, comparing Medicare payments to insurance company profits is a red herring, they're apples and oranges. A better comparison (though still not good) would be revenue. Gee, I wonder how much REVENUE insurance companies bring in?
In 2007, the top 5 companies brought in $404,731,085,044. This amount has increased since then.
http://www.reuters.com/article/2008/07/15/idUS187049+15-Jul-2008+PRN2008...
Perhaps the most disgusting thing about this letter and people who spew this kind of nonsense is that medicine isn't about money, it's about life. If a government program operates with 99.999% waste, I'm still all for it if it saves one life.
My comment is lost in moderation...
I said basically the same as PP.
Comment still lost in moderation?
three days later and still not posted...
It's posted, now. Good
It's posted, now. Good points.