Thursday, October 4, 2012

Following the money

In last night's Presidential debate, Barack made a claim;
Every study has shown that Medicare has lower administrative costs than private insurance does, which is why seniors are generally pretty happy with it. And private insurers have to make a profit. Nothing wrong with that. That's what they do. And so you've got higher administrative costs, plus profit on top of that. And if you are going to save any money through what Governor Romney's proposing, what has to happen is, is that the money has to come from somewhere.
Putting aside the factual inaccuracies--Medicare hides its administrative costs by using other Federal agencies, such as the IRS, to perform many administrative functions--and the complete misunderstanding of how profits enter the picture--they flow from efficiently managing a business's costs, not by adding them on top of those costs--maybe, President Obama should ponder the implications of this action by his Attorney General;

Ninety-one people including doctors, nurses, and other medical professionals have been charged with committing $430million in Medicare fraud in seven U.S. cities, Attorney General Eric Holder said on Thursday.
An investigation coordinated by the U.S. Justice Department and the Department of Health and Human Services uprooted alleged false billing schemes involving $230million in home health services, over $100million in mental health services, and $49million from ambulance transportation.
Charges range from healthcare fraud and conspiracy to wire fraud, kickback violations, identity theft and money laundering. The number and cost of the alleged fraud makes it the largest bust of its kind, Mr Holder said.
'Of its kind', meaning, that there are other instances of the same thing.  Penny wise...Pound foolish?

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