Billions Lost on Medicare and Medicaid Fraud

The Office of the Actuary at the Centers for Medicare & Medicaid Services released its annual report on February, 16. Published in the journal, Health Affairs, the cost of health care – a true oxymoron – is expected to grow at an average annual rate of 5.6% over the next 10 years, reaching nearly 20% of our GDP by 2025.

By comparison, GDP growth is projected to only grow 4.4% annually over that same time period.

The US devotes at least 50 percent more of its economy to health care than do other developed countries. The increase is tied to the aging baby boomer generation and more people of all ages applying for Medicare benefits.

The Commonwealth Fund published a cross-national comparison of 13 advanced countries to assess the performance of the U.S. health care system. The high-income countries evaluated were: Australia, Canada, Denmark, France, Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

The results revealed that health care spending in the U.S. far exceeds that of other high-income countries. For example, US healthcare spending is more than $9000 per capita. Compare that to $4569 per capita in Canada and $3855 per capita in New Zealand.

With all that spending, we’re not healthier. In fact, the US ranks last among the 13 countries in life expectancy, infant mortality rate, the percent of the population over 65 yrs with two or more chronic conditions and obesity rate.


The complete Commonwealth article is worth reviewing – the graphs are sobering.

What else is driving up the cost of healthcare? Where does all this money go?

For one thing, billions are wasted on medicare fraud and abuse. In 2015, it was estimated that nearly $60 billion of American taxpayer money, or more than 10 percent of Medicare’s total budget, was lost to fraud, waste, abuse and improper/fraudulent payments. Medicaid’s improper payment rate to doctors, hospitals and others, recipients was thought to be $36 billion in that same year.

U.S. Comptroller General Gene Dodaro recently told members of the House Committee on Oversight and Government Reform:

“The federal government doesn’t have a full estimate of improper payments, although GAO estimated it was at least $137 billion in 2015.”

This is a staggering amount of money, literally tossed down the drain.

What if that money was applied to new infrastructure in this country? Or new airports? Or new dams, bridges, and levees…or even for acquiring true health instead of just paying billions of dollars for disease management. 

As US expenses to treat disease continues to rise, gobbling up nearly 1/5 of our GDP, it seems the only winners are the insurance companies and of course, the drug companies.

They always win.


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