Comment by hackuser | Hacker News Reader

Comment by hackuser | Hacker News Reader

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> The program succeeded despite corruption. The Times of India recently reported that an audit had found clearly fraudulent payments — including some to a 60-year-old woman registered as having been pregnant five times in 10 months.

I'm uncomfortable with the meme of corruption in public welfare programs (and I may be overreacting to the author's implication, but I still think my point applies more generally). There is corruption in every program and institution, from private business to religion to government to little league baseball. If you have thousands or millions of people involved, some will behave badly; it's the nature of humanity. We can't wait to do things until the institution or the people it services are saints.

Not all corruption is equal, and absolutely we should find ways to minimize it (which usually involves looking in the mirror and making systemic changes, not complaining about the inevitable, well-established consquences of our current system). But considering the string of massive corruption scandals on Wall Street, for example, I'm surprised when people think government and welfare programs are particularly corrupt.

In the US there have been recent papers discussing how roughly 10% of the medicare budget goes to people who live less than a year, with the implication that perhaps we shouldn't be spending so much on people with so little time.

It is a well established fact by the CBO (Congressional Budget Office) that roughly 10% of the medicare budget is wasted on fraudulent claims (even though their rejection claim rate is roughly 1000 times that of most private insurance).

So there are some cases where the status quo is untenable, fraud is blatantly obvious, and people could die untreated do to a lack or resources.

Yes, fraud and corruption should always make the headlines and should always be a priority to eradicate.

[EDIT for typo of medicaid instead of medicare]

Fraud should be a concern, however at some points, the attempts to eliminate it outweigh (in terms of cost and effort) the effect of its existence. At that point it becomes a morality issue rather than a practical one.

For comparison, I wonder if the CBO was given full investigatory power into private insurance, would they discover a higher or lower fraud percentage? It would not surprise me if they were higher, and that at some point they just accepted that fraudulent claims would be cheaper to ignore than to uncover, based on dollar amounts and so on. It similarly of course wouldn't surprise me if they were lower being able to deny more people at the outset, or were able to use more information to find high risk claims (that privacy concerns prevent the government from using for the exact same purpose).

I would expect it to be the reverse: there is no incentive for government programs to root out fraud, if they fall short, they just raise taxes. For private companies - if they are being defrauded, it directly affects their bottom line, and the bottom line of their executives (who would be VERY interested to make sure bonuses increase).

If we are talking about fraud within the company/government, I would expect the same - less in the company than in the government. Not zero, but less overall.

The people in charge of trying to root out fraud don't have the power to raise taxes. They aren't congresscritters.

That doesn't imply that they aren't demoralized, ineffective, or hamstrung, but still.

wow - really? Negative points for pointing out that the government has no financial incentive to root out fraud? Must be government shills.

> So there are some cases where the status quo is untenable, fraud is blatantly obvious, and people could die untreated do to a lack or resources.

I agree in general; I seem to have given another impression. Absolutely we should reduce corruption and there are cases where it causes serious problems.

But if by "untenable" you mean Medicare should be shut down rather than continue like this, I'd disagree. You describe a serious problem, but worse would be to let all those people suffer. But I agree that 10% is a huge waste (in an enormous budget) the opportunity cost - the people who go untreated - seems high; reducing that waste should be a high priority (I'm assuming they are correct; I have no personal knowledge).

EDIT: Make wording a little more precise

I don't mean untenable as in it should be shut down, but untenable in that people are about to start having treatment withheld do to lack of funds. Given that medicare is already considered simply a supplemental insurance program, there are already people suffering from a lack of available resources.

As for trusting the CBO, if you can't trust their accounting, there's literally no one else you could trust.

Exactly. Fraud is terrible in both cases, and should be a known factor so that we can evaluate how to procede.

For instance, aid to Sub-Saharan Africa constitutes roughly 70% of the budget of SSA countries. Illicit outflows of that aid money is increasing at a rate of 20% per year. I'm struggling to find the data about how much aid actually reaches the intended location, but it's significantly lower than one would hope for.

Sure, I think that foreign aid to developing countries should happen. But clearly the way that we're doing it right now is encouraging a self-perpetuating corruption economy. Burying my head in the sand about corruption of foreign aid wouldn't help anyone, just like merpnderp is saying.

I think you've laid out why corruption and fraud should always be a high priority to fight even when they are a low cost. Fraud is corrosive, and when left unchecked will expand. If a dentist can get away with 50 fake treatments at a nursing home one year, why would he shoot for 100 fake treatments the next, thus doubling his portion of the fraud.

Which is exactly what you've described in Africa. If a general can divert 20% of the aid to his offshore account one year, why would he shoot for 40% the next?

I would then suggest its best to highlight possible corruption instances rather than pursue them..

that way the corrupt people see it in their interest to pull back rather than increase...

Obviously it needs to be paired with some instances being pursued to its logical conclusions and done so publicly.

Expanding on sophalces' point:

Assuming the figures you quoted are correct, how much of the medicare budget is spent on fraud prevention? That includes:

* time spent by Congress and Medicare deciding what is and what is not covered, * deciding who is and who is not covered, * what the rules and processes are for preventing and discovering fraud, * what the process is for handling fraud * the actual time needed to enforce these rules and follow the processes * time spent by care givers and patients complying with the rules

I suspect that all of that adds up to more than 10%, and it would go much higher if Medicare tried to reduce the fraud rate below 10% through further enforcement.

Medicare's budget is around ~$600 billion. It is highly unlikely that the CBO, FBI, DHS, and IRS spend $60 billion looking into potential medicare fraud given how many of those just named organizations could fit into a $60 billion budget (3 of the 4).

Strangely, you left out of that list of organization the main one that investigates Medicare fraud (and the one whose expenses in doing so are included in Medicare's budget), to wit, HHS, the agency that actually administers Medicare.

(Three of the Four agencies you mentioned don't even investigate Medicare fraud, except incidentally.)

Those organizations do investigate medicare fraud with the HHS. And do you really believe that more than $60 billion is being spent investigating? That would make the auditing organization roughly 6 times as big as the IRS.

Given how big a deal the FBI made out of a medicare fraud case that garnered nation attention just a few weeks ago, I'd say very little is spent tracking down fraud.

Here's the biggest bust ever, and it amounts to catching around $100/million a year in fraud, a tiny fraction of the $60b total. http://www.hhs.gov/news/press/2015pres/06/20150618a.html

> And do you really believe that more than $60 billion is being spent investigating?

I don't think it really matters, since you are the one who narrowed the original suggestion that the total cost of Medicare fraud -- which you've stated is $60 billion with a handwave at CBO without specific citation -- might be less than the total cost of resources expended in "fraud prevention" (not just investigation), including (explicitly, per the post upthread) the resources expended in all of the following activities:

* Congress and Medicare deciding what is and what is not covered

* deciding who is and who is not covered,

* what the rules and processes are for preventing and discovering fraud

* what the process is for handling fraud

* the actual time needed to enforce these rules and follow the processes

* time spent by care givers and patients complying with the rules

You reducing this to just investigation costs is, well, missing the point being made.

Sources?

>> I'm uncomfortable with the meme of corruption in public welfare programs

Its a story about a developing country.. it would be a brave editor who approves a piece without the story sticking to the dominant narrative about the country.

Not sure if there are any Journo's who can comment on my insinuation but that is how i see many media pieces. not sure if it is forced by editor or comes from a journo's own biases.

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