How much of our rising health care costs comes from fraud
in the health care system by players who know how to game it for their
own benefit? Enough to cloud the reform debate, that's for sure. And it
can't be pinned on one player; it's up and down the value chain in
medical care.
On the one hand, you have the recent 60-Minutes report on drug dealers in Miami who
defraud Medicare by opening fake clinics and pharmacies. They get
reimbursed for artificial limbs ordered for patients whose IDs they have
bought on a black market for Medicare information.
Further up the line you have hospitals who bill Medicare for
procedures that could be done in an outpatient setting where they would
cost less, or for total care of a patient whose actual care is split
between two hospitals, both of whom bill for the entire care. (Go look
on the Center for Medicare
and Medicaid Services web site for the Recovery Audit Contractor pilot program in which
this was discovered.
And then there's the sweetheart deal the insurers got to participate
in the Medicare Advantage program, which was started when CMS was
afraid not enough providers would participate in Medicare. In Medicare
Advantage, all the players get paid more than by regular Medicare for
providing the same services. Medicare Advantage is targeted by the
cost-cutting initiatives, but here's what the plans said: "many
commenters contend that, if rates are reduced, MA organizations will
have trouble maintaining their provider networks, because they will have
to pay providers less, and will have to raise premiums, increase
co-pays and deductibles, especially in rural areas, Puerto Rico, in the
case of Special Needs Plans (SNPs), PACE plans, and plans that are in
direct competition with cost plans."
Finally, we get to the pharmaceutical companies, where we learn from a great piece by Naomi Freundlich that
"by suppressing negative studies, relentlessly pursuing positive trial
results, and paying academic researchers to promote their therapy, Merck
Schering-Plough has managed to hold onto a $4.6 billion market for a
drug that has never been proven to be better than cheaper generics in
preventing heart attacks or death.
"
That's a pretty shocking allegation from the HealthBeatBlog. It seems that
Merck Schering-Plough holds the patents on Vitorin and Zetia, two
widely advertised drugs that in studies have proven no more effective
than the vitamin niacin and a generic statin, simivastin.
And this doesn't even begin to touch controversial issues like
outcomes-based medicine, which might mean fewer mammograms, CT scans,
and other procedures that irradiate us often unnecessarily as the doctor
either tries to prevent malpractice allegations or perhaps even owns
the imaging center.
Everywhere you look there is waste and downright fraud in the health
care system, perpetrated by both payers and providers, public and
private. I have no doubt that Obama is right that we could fund health
care reform by cleaning up the waste, but the lobbyists for the staus
quo don't want it cleaned up. They are profiting from waste and fraud,
not from legitimate services, IMHO.