Helpful suggestion from Newt Gingrich

I don’t ordinarily rely on Newt Gingrich as a source of political advice, but (accidentally, no doubt) he actually makes a useful suggestion, in the course of an obnoxiously  silly article demanding that the President’s speech tonight consist of nothing but right-wing talking points:

Does he include a section onsaving money by stopping payments to crooks who are bilking the taxpayers for $70-120 billion each year in Medicare and Medicaid fraud? For 88 percent of Americans,  this is the first place they would look to find savings in our health care system.  Is President Obama willing to look there?

Malcolm Sparrow puts the fraud share of medical expenditure (not waste, but outright fraud) at about 10%, or about $200 billion per year.  (Not all of that is from public programs, of course.)   So it certainly makes sense as a substantive matter to beef up fraud investigation and prosecution; Sparrow argues that the “auditing” approach, designed to catch error rather than fraud, is badly misguided.

Of course investigating fraud is not the same thing as eliminating fraud.   How much could be saved, and at what cost, remains an open question.

But that’s always true, and it has never stopped the Republicans from offering “eliminating fraud, waste, and abuse” as the magical formula for balancing the budget without raising taxes.  So why not take a page from their playbook? Announce that we’re going to pay for the subsidies in the bill by eliminating $100 billion per year in Medicare and Medicaid fraud, meanwhile adopting the subsidy forumla that phases about above, rather than below, the median family income:  400% of poverty rather than 300%.

Once the bill is passed and it turns out that eliminating fraud can’t be done with a magic wand, then solve the resulting budget problem by raising taxes:  on high incomes, on decedent’s estates, on greenhouse-gas emissions, on financial transations.

Footnote Gingrich gets extra-special dishonesty points for this passage:

Is he for sustaining the Senate rule of 60 votes to ensure a bill that has wide, bipartisan support? Or is he prepared to destroy long-standing Senate tradition and ram through a radical bill with 51 votes?

This from the man who, as Speaker, smashed every tradition of the House to make himself a virtual dictator.  Are the wingnuts really prepared to argue that allowing a bill to pass by a majority, as the Framers intended, is “radical”?  And that they were wrong to use reconciliation to push through the Bush tax cuts, the greatest piece of class-war legislation ever enacted?

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

4 thoughts on “Helpful suggestion from Newt Gingrich”

  1. Is he for sustaining the Senate rule of 60 votes to ensure a bill that has wide, bipartisan support? Or is he prepared to destroy long-standing Senate tradition and ram through a radical bill with 51 votes?

    *Snort* Long-standing tradition my ass. The "avoid filibuster" rule that has basically become standard Senate procedure didn't really come into being until the past 20-30 years.

    Of course investigating fraud is not the same thing as eliminating fraud. How much could be saved, and at what cost, remains an open question.

    A big question, in my mind. Medicare already has only 3% overhead, so you're essentially at the point where it would probably cost a lot simply to investigate and punish Medicare fraud.

    That reminds me of something a European History Teacher I had (who had lived in Europe for a while as a young man, and still travels there extensively) told me about a difference between Europeans and Americans. He told me that Americans tended to have this obsessive focus on "punishing the cheaters", whereas the Europeans tended to weigh the costs of the cheaters/moochers versus the benefits of the system , and decide to keep the system.

  2. The fraud doesn't get counted as overhead; it gets counted as medical expenditures. We're talking about things such as expensive tests billed for when the date of service is after the date of death on the mortality tapes. One objection to the way that Medicare is run is that the pressure to keep overhead low translates into insufficient attention to weeding out false claims.

  3. Private health insurance practices (such as recission) are not legally fraudulent, but the companies have to deny as much care as they can get away with in order to remain profitable. Health insurance is the only major industry I am aware of whose operating principle is "We shaft the other guy and pass the savings on to you." And Gingrich tolerates this pretty well.

  4. The Canadian experience is usually that improper claims (probably fraud in some sense) run about 3% of any system, welfare as well as health care – and that is just about the point at which it is more expensive to reduce it further than you save by the reduction. Of course with a public single-payer system (for large parts of the health care world, but far from all of it), there is someone with both resources and motivation to minimize fraud. In a more diverse system with little central supervision, there are no doubt more interstices in which illicit practices can hide.

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