Maybe that cost is low. I don't know, but putting out a number with no context seems to be for shock value only, not realistics.
How much would it be if they met doctors?
A new high school in the US costs 100 million dollars. It seems they build 200 such schools per year. All of a sudden we have a spending of 20 billion on just new high schools each year. Is that too much or too little?
> Sixty percent of UnitedHealth home visits generated at least one new revenue-producing diagnosis of a condition no doctor was treating, the analysis showed.
Medicare calculates what it costs to cover an average beneficiary by region, age, etc, and then private insurance companies can sell Medicare Advantage (MA) plans to people in place of standard Medicare coverage, and Medicare reimburses them for providing that coverage. Medicare is essentially saying "it costs $10K/year to provide standard Medicare benefits, if you guys think you can do it cheaper we'll give you the $10K as long as you provide the exact same coverage".
What are they reimbursed is also risk-adjusted so that if any given plan covers a sicker than average population, they get reimbursed more.
What is happening here is these plans are adding superfluous and questionable medical diagnoses to drive up that risk score and get higher payments from Medicare. The theory behind it is if having condition X means you cost an average of 10% more than an average beneficiary, and every person who buys an MA plan from a given company has condition X, they get reimbursed 1.1X the average. They are adding these dubious diagnoses to drive that number ever higher.
What this has led to in practice is MA costs the government much more than standard Medicare. And this is despite the fact that MA plans tailor their offerings to attract a healthier than average population, but then they goose the risk score so the financial effect is the opposite.
An improperly devised system that can be easily circumvented.
It is not relevant to the subject matter of health care, it is not different than corn subsidy or whatever.
But instead of doing that, they realized that they could just pressure providers to up-code and goose the risk score and make more money.
MA is relatively new. We needed many years of experience to see how the market would play out. But now we've known for a decade or so that it is clearly costing way more than it should and offering no additional benefits to justify the cost. Unfortunately we have not yet had the political will to fix it, and the handful of massive companies making bank on it will fight tooth and nail to keep the gravy train rolling.
The lesson from MA is that people will figure out how to game the rules, so we need to be reactive and flexible and able to update the rules accordingly. But because health care is a complicated and personal subject, people are wary of change, and we have very little political will to fix this. This will get even harder with the recent Chevron decision, which will serve to make it even harder for CMS to fix the regulation of MA without new legislation.
I'll simplify it for you: The government pays health care providers for providing healthcare. It is very easy to defraud the government by billing for fake work, so fraud is common and costly.
The actual details are irrelevant. There are some extra steps involved, but functionally it's the same as a nurse sending a bill that says "I treated patient X for condition Y" and the government going "Sounds good, here's some taxpayer money"
Since the diagnoses are not followed up by treatments, nothing?
> Is that too much or too little?
It would be too much, if no students were admitted to those schools.
United Health Care and others have figured out that if you go to someone's home, dubiously diagnose them with a condition that Medicare has deemed expensive to cover, Medicare will send them more money to provide health insurance for that person, whether or not they actually have the condition or ever receive treatment for it.
ETA to make it explicit with an exaggerated example: UHC gets say 10K/year from the govt to give you health insurance. Then UHC sends a nurse to your house who shines a flashlight in your ear and says "you have diabetes". Now UHC gets 15k/year from the govt to give you health insurance.
It is simply that bureaucrats have passed regulations where they do not understand the repercussions
Every domain that is bogged down by bureaucracy will have inefficiencies of various magnitudes.