AGORA: Both Parties Fumble on Medicare

Georgakas and Scaros often take opposite sides on most issues - but they agree that both major parties have failed in dealing with Medicare. Georgakas rails against Medicare fraud, while Scaros blasts hospitals for charging so much in the first place.


Dino, in this election year, all Congressional incumbents and challengers will assure voters they are going to “protect” Medicare. What this actually means is that the Republican deficit vultures will tell us increased costs, reduced benefits, and more privatization are fiscally necessary. Democrats will shout Oxi and then acquiesce to some of these cuts. I wonder what your view is of a third alternative that would save billions in costs and increase the quality of Medicare/Medicaid.

Numerous experts ranging from writers for the conservative Economistto Donald Berwick, the former head of Medicare/Medicaid, to Andrew Hackbarth of the Rand Corporation and the American Association of Retired Persons (AARP) have estimated that fraud and waste account for 10% of Medicare/Medicaid’s $1 trillion-plus spending. Addressing that $100 billion fraud would eliminate the cuts in service and rise in prices being proposed.

Major culprits in medical fraud are phony clinics and retirement communities with corrupt physicians. Patients that do not exist, treatments that aren’t given, house calls not made, emergency ambulances never sent, and medical equipment never used are the bread and butter of these criminals. Scrutiny of these medical fakes is so haphazard that enterprises closed by one state often reopen under a new name in a different state.

A positive initiative of Obama has been to spend more money on policing efforts. Every $1 spent on enforcement has returned $8 in recovered or saved funds. The offenders are often quite blatant. One doctor managed to order 1000 power wheel chairs and another had billed Medicare/Medicaid for twelve million dollars. Doctors involved in such swindles should have their licenses revoked and those with minor or one-time offenses need to have their licenses suspended. Patients who knowingly cooperate in such schemes should become ineligible for Medicare/Medicaid assistance.

Announcement of increased policing efforts followed by well-publicized cases in every state involving severe fines, prison, and other disincentives would discourage numerous minor offenders as well as high-stakes crooks. Rather than taking such a course, Congress, showing its usual incompetence, proposes reducing rather than increasing the funds for policing fraud.

The Congress is also guilty of not allowing Medicare/Medicaid to negotiate prices charged by drug companies. If Medicare/Medicaid was allowed to bargain for their 120,000,000 combined patients, drug costs could drop to levels enjoyed by Canada which buys from American firms at negotiated prices. Saving each American patient even $100 a year translates into more than a billion dollars in annual savings. The only “losers” would be drug manufacturers that would have to accept the same level of profit earned dealing with nations like Canada.

Two other major scams are people who illegally cashing checks for deceased persons and people using false Social Security numbers. In this era of computer wizardly, it would be simple for all states to send the record of every death to Medicare/Medicaid. The agencies could then immediately cease payments. Consulting with Social Security to make sure a number is valid and fits the profile of the person asking for aid also would not be difficult. Billions could be saved. Anyone indulged in such fraud should minimally lose their Medicare/Medicaid eligibility.

Medicare procedures also need to be amended. Doctors are now required to deal with 140,000 options making a claim. These include nine ways to report bites by turkeys! Streamlining reporting procedures and other red tape would allow doctors to spend more time healing and less time filling out forms. The savings in clerical costs would translate into more service at similar or reduced costs.

Even with the problems just noted, Medicare/Medicaid have operating costs much lower than those of private insurers. Discussing their problems is not meant to belittle their general success, but to spur conscientious reforms that could effectively address those problems.


Dan, most Americans, thankfully, can afford a cup of coffee. Suppose tomorrow morning, however, when they walk into their favorite coffee shop on their way to work to have their first cup of the day, they expect the price to be what it normally is – say, two dollars – but instead, they are shocked to learn that the price has gone up somewhat: to five hundred dollars! Yes, that’s right, $500 for one cup of coffee! Not to worry, the shopowner says: “you can buy coffee insurance. Then, all I’ll need is your card and a $2 copay, and your insurance will take care of the rest. In fact, you can apply for coffee insurance right here, on the spot.”

The bewildered customer, realizing the alternative is to fork over a whopping five hundred bucks, signs up for the insurance and leaves the coffee shop no poorer than any other day when his out-of-pocket expense for the coffee was two dollars. Nonetheless, anyone with even a smidgen of curiosity would ask the obvious question: “why in the world are you charging $500 for a cup of coffee to begin with?”

And that is exactly where the root of the problem lies with healthcare. Who pays for it is secondary. The real issue is: why in the world is it so expensive to begin with?

We seem to buy everything else without too much of a problem. Sure, gas is expensive, but Americans don’t walk around with gas insurance, making copays and letting their carrier take care of the rest. Even as I write this, the humming of my air conditioner reminds me that I need to buy a small window unit for another room later on this week. It will cost around $250, maybe less. And I’ll pay for it outright. No copay, no air conditioner insurance. But if it cost $25,000, I’d have to give it some serious thought. I might start Googling “air conditioning insurance policies” after all.

Sure, a hospital stay has quite a bit more overhead associated with it than brewing a cup of coffee, or even manufacturing an air conditioner, and so, naturally, those costs must be passed on to the consumer. But have you seen those hospital bills – with those secretive codes (they even have college majors for that now – “medical billing and coding,” they call it) – that takes a master sleuth to decipher? Why on earth is a stay in a dirty, smelly, dingy, gray, depressing, germ-infested hospital several times more expensive than a luxury suite at the Waldorf-Astoria?

We’ve had a War on Poverty, a War on Drugs, and a War on Terror. I say it’s time for a War on Health Care Costs. And I’ll vote for the first presidential candidate who declares it.

And as an added bonus, I’d love to see that candidate ban pharmaceutical commercials. I’d rather see TV skits for Camel, Marlboro and Winston, and for marijuana, than for the poison the pharmaceutical conglomerates peddle on TV – reciting a litany of horrific side effects as soothing music plays in the background while a couple holding hands strolls through a floral garden.