Health Care: Too Big to Fail

In the frenzy over jump-starting the economy, the House stimulus bill includes, among other straws being grasped, $117 billion of spending for health care, most of it to maintain coverage for the disabled and newly poor. Otherwise, the political consensus is that we can't "afford" to reform the system.

If anything, there is a stronger case to be made that we can't afford not to. Paul Krugman scratches the surface today with the argument that "helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan--and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans’ current anxiety."

He cites research showing that Obama's campaign promise of universal coverage would add “only” about $104 billion to federal spending next year, but this overlooks the huge possible benefits in reforming a system that rewards greed and inefficiency.

Start with health care fraud by hospitals, doctors, pharmacists and other care providers. which the FBI estimates at between $60 and $100 billion a year. Stopping that could be a small growth industry to employ some of the analysts being laid off by the banks and Wall Street, to say nothing of starting to fix a system that has been criminalizing the healing profession in order to let its members survive.

But the big payoff would be in transferring the estimated one-third of the $2.4 trillion-and-counting that goes for insurer overhead and profits into patient care.

In the current economic climate, the SCHIP expansion of coverage for children which George W. Bush resisted on "philosophical" grounds is about to be signed by the new president, and the money in the House stimulus bill has aroused Conservative fears about "nationalizing" the health care system.

Just so, and it opens the way for a healthy debate over whether the current health care system, like greedy Wall Street, is really "too big to fail" and why it can't evolve toward the single-payer system that rational analysts favor.

Krugman cites Rahm Emanuel, the White House chief of staff, declaring that “you never want a serious crisis to go to waste” and points out that FDR "was able to enact Social Security in part because the Great Depression highlighted the need for a stronger social safety net."

In repairing the economy, health care can be both part of the stimulus and the 21st century social safety net.

Stealing from the Sick

Over the next year, Presidential candidates will prattle about health care, but none of them will talk about the elephant in the operating room--the massive fraud that bleeds the system.

Another piece of the picture emerges today in a whistle-blower lawsuit that, according to the New York Times, claims "improper sales practices, together with erroneous accounting, are invisibly draining millions of dollars out of vital public programs like Medicare through overcharges or unauthorized uses...systemic fraud across a whole network of companies and more than 7,000 health care institutions."

Cynthia Fitzgerald's sickening account of her experience in the medical supply business involves kickbacks, bribes and bid-rigging. For complaining about such illegalities, she was, of course, fired as a trouble-maker.

Now she is suing under the False Claims Act which, according to Taxpayers Against Fraud, has helped the government recover more than $20 billion from health care companies since 1986, $5 billion of it in the last two years.

But that may be small change compared to the blood money that is hemorrhaging everywhere. According to the FBI, health care crime by hospitals, doctors, pharmacists and other care providers is adding up to between $60 and $100 billion a year in the system that is saving us from socialized medicine.

If we could stop that, it would pay for almost six months of the war in Iraq.

Health Care Crime

Of all the ills of American health care, least visible is the pervasive fraud it encourages in everyone involved--doctors, patients, labs, hospitals and, most of all, the insurers who manage the mess.

One small symptom can be seen today in a New York Times report of 91 Medicare audits showing “widespread violations of patients’ rights and consumer protection standards” in private drug plans for the elderly that were supposed to save them money but, in some cases, are endangering their lives.

Slap-on-the-wrist fines totaling $770,000 on 11 companies won’t make a dent in the billions they are raking in from the most vulnerable Americans, who might have been helped by authorizing Medicare to bargain with pharmaceutical companies or allowing medications to be imported from Canada instead of devising new ways for insurance companies to fleece them.

Other clues about the enormity of health care fraud emerged this summer when the new Justice Department Medicare Fraud Strike Force announced measures to crack down on medical companies that send phony bills or provide excessive treatments, pointing to 2,400 investigations last year and warning that more cases were on the way.

The FBI, which estimates health-care stealing to total between $60 and $100 billion dollars a year, lists a few of the ways it’s done:

Hospitals, doctors, pharmacists, and other care providers submit fake bills for services never rendered--or overcharge for those delivered.

Service providers bill insurance for unnecessary and costly procedures.

Doctors sell prescriptions to patients for cash.

Companies charge insurance for expensive equipment but provide poor substitutes.

Crooked M.D.s entice patients to visit their offices for "free services" or gifts, then steal their personal information and use it to file fake claims.

If you have a strong stomach, you can Google “health care fraud” and get 23 million hits, many reporting convictions of providers across the country. But reading too many may make you sick and in need of medical attention.