We Must Stop the Rampant Fraud in the Health Care Industry

As a member of the Senate health committee, one of two Senate panels dealing with health care reform, it has become apparent to me that real health care reform must address the billions of dollars in fraud and abuse that comes from the major corporations in the health care industry.

What we have seen over the last several decades is the systemic fraud perpetrated by private insurance companies, private drug companies, and private for-profit hospitals ripping off the American people and the taxpayers of this country to the tune of many billions of dollars.

The rampant fraud is another reason why our current health care system, dominated by private insurance companies, is the most costly, wasteful, complicated and bureaucratic in the world. Its function is not to provide quality health care, but to make huge profits for those who own the companies. With 1,300 private insurance companies and thousands of different health benefit programs designed to maximize profits, our country spends an incredible 30 percent of each health care dollar on administration and billing, exorbitant CEO compensation packages, advertising, lobbying and campaign contributions. Public programs like Medicare, Medicaid and the VA are administered for much less.

In recent years, not only have we seen massive fraud by the health care industry, but we also have been paying for a huge increase in health care bureaucrats and bill collectors. Over the last three decades, the number of administrative personnel has grown by 25 times the number of physicians. Doctors and nurses in Vermont have described to me in painful detail the amount of time and money they are forced to waste negotiating with insurance companies about how they can treat their patients.

Not surprisingly, while health care costs are soaring, so are the profits of private health insurance companies. From 2003 to 2007, the combined profits of the nation's major health insurance companies increased by 170 percent. And the top executives in the industry are receiving lavish compensation packages -- averaging $14.2 million for the top seven companies.

On top of all of this, a review of court records and other public documents shows that billions more dollars are being lost to fraud and outright corruption. Importantly, this is not the case of "one bad player" acting illegally. This is a situation where fraud appears to me part of the normal business model. It is the rule and not the exception.

There is example after example indicating that virtually all of the major pharmaceutical companies, insurance companies and private hospital chains have been involved in massive health care fraud over the past decade.

Health and Human Services Department investigators earlier this year found that 80 percent of insurance companies participating in the Medicare prescription drug benefit overcharged subscribers and taxpayers by an estimated $4.4 billion.

There also have been major criminal and civil cases against many of the leading corporate health care providers in the country, including:

In 2004, Warner-Lambert, a division of Pfizer Inc., pled guilty to two felonies and agreed to pay $430 million for fraudulently promoting the drug Neurontin.

In 2003, GlaxoSmithKline paid $88 million in civil fines for overcharging Medicaid for its anti-depressant Paxil.

In 1999, Hoffmann-LaRoche paid a $500 million criminal fine for leading a worldwide conspiracy to fix prices for certain vitamins.

In 2009, UnitedHealth, a leading insurance company, paid $350 million to settle lawsuits brought by the American Medical Association and other physician groups for shortchanging consumers and physicians for medical services outside its preferred network.

In 2009, the Centers for Medicare & Medicaid Services barred WellPoint, a major insurance company, from participating in Medicare Part D because WellPoint has "demonstrated a longstanding and persistent failure to comply with CMS's requirements for proper administration..."

In 2000, the Hospital Corporation of America agreed to pay $745 million to settle civil charges that it systematically defrauded Medicare, Medicaid and other federally-funded health programs.

It is absolutely imperative that real health care reform prevent major insurance companies, drug companies and hospital chains from perpetrating fraud and abuse on government health care programs and individuals, which are driving up health care costs in this country by billions of dollars every single year.

To me, the evidence is overwhelming that we must end the for-profit private insurance company domination of health care in our country and move toward a publicly-funded, single-payer Medicare for All system.

Sen. Bernie Sanders is a member of the Senate Health, Education Labor and Pensions Committee.

 

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Comments

[Economike]

That's what happens when your system of Goverment is Capitalistic Anarchy.

[Artemis34]

Find Out Where Congress Stands

http://standwithdrdean.com/where_congress_stands

[krocklin]

These huge pharmaceutical companies are cranking out drugs not to benefit anyone but themselves.
There might be rare exceptions, when discoveries have been made, like penicillin, but these are hen's teeth from a bygone era amidst the plague of drugs making the population nuts and unhealthy.
And yet people believe all this P.R. A healthy person would never take any of the Big Pharma drugs.
But TV ads rule; money rules; doctors suck the lifeblood out of the population, preying on the vulnerable with no scientific basis at all.

[krocklin]

All but the top income earners are in danger of our medical system threatening the very stability of their family life and their mental equillibrium.
And yet we still tolerate this system.
But Bernie Sanders is as rare as a doctor who takes Hippocrates's Oath seriously. Few such men exist I am afraid.
I am praying for a miracle though - that consciences will awaken. I don't know if it is possible however IN THIS COUNTRY.

[RocknRollChef]

Thank you Senator Sanders for always seeking and speaking the truth and not allowing yourself to succumb to the greed and decadence of the government power mongers.

We need to keep repeating the mantra that health insurance companies are in it to "make money". Which has become impossible for them unless they deny people's claims.

Support HR676 now!

[CactusTom]

Ok, lets see to it that all these Republican Congressmen who are shilling for the private insurance companies must get off THEIR OWN socialized medicine health care package, and be forced to joint one of those private health care plans they claim to love so much.

[AnnfromCA]

I agree.

Good postion paper.

Although, I'm not sure this is the right format.

[quidam56]

Politician$ and Profit Machine$ drive this Nation. Change will only come from the bottom up, we are the change we voted for. Because of pure greed, there's no value in people and their quality of life. Take cancer. In four years the cost of chemo has gone up 400%. How many cancer treatments have cured in comparison to killed ? I read where the largest health care corporation in America is buying the largest funeral corporation in America. At the end of the day, the status quo is all about the love of money. When 72% of Americans' want single payer, public option and the Politician$ say they don't have the votes, clearly the Profit Machine$ are in control of those votes. When your home becomes a mountaintop removal mine site, clearly the Politician$ and the Profit Machine$ are the one's who made those rules, laws and decisions. Just because we voted for change doesn't mean it's going to happen. We may not have $ 1.4 million to lobby congress daily like the health care industry but we do have a voice http://www.wisecountyissues.com/?p=62

[LITU]

You'll never convince the red-staters, Senator. They appear to like impoverishment, perhaps in part because it typifies their boon or bust mentality of self accomplishment.

[epiphany1234]

Thank you, Senator, for this insightful article.

It's time to call a spade a spade...time to call out the privateers in the health care industry who have ripped off the government and the people for decades, causing untold tragedy and death due to the unavailability of adequate health care.

Why isn't the Obama administration acknowledging the facts you have raised about past behavior and insist on preserving this "cash cow" in some form or another for these health care bandits? Why aren't the obstructionists like Feinstein, Baucus and Landrieu, to name a few, not acknowledging this sordid history?

I don't have the answer to their silence, but I'm printing off copies of your article and mailing it to them so it can't be said they were unaware.

[myoungholt]

Thank you, Senator Sanders!!!!!!!!!

Isn't it conflict of interest for any lawmaker to hold stock in a field in which s/he might have to vote on legislation?

[BBinMT]

If we only had 50 or 60 Bernies. A senator that really cares for/about the people.

[mollymom]

Go Senator Sanders! Keep shining the light on the real problem in our healthcare system in the US. The fight against nationalized healthcare is being led by the parties profiting (REALLY profiting) under the current system. Using the same scare tactics that worked for years for the Republicans, they will buy scary ads on television and hire scary consultants to write articles about the end of good healthcare. Obama was able to defeat this kind of tactic last November and with the help of people like Senator Sanders, he will be able to do it again. The only people who should be afraid of national health care are the CEOs and insurance and drug companies making obscene profits under the current broken system. Certainly the uninsured, the under insured, and the regular guys struggling to meet their insurance payments are afraid!

[SEQUOIABISON]

Now this is what a real Senator looks like, someone working for the people and ignoring the legal bribes offered by lobbyists. Senator Sanders you are my Hero.

[karma13612]

My gosh Senator Sanders!

Outstanding editorial! And of course, it's from a Senator of Vermont! Great state!

OK, Senator, Go kick butt in the Senate.

America is behind you! Get the rest of the Senate to start talking like this!!

thanks and have a great 4th!!