Looking For Waste in the Health Care System? Try Anywhere

Francine Hardaway - Serial entrepreneurship veteran
Posted: December 1, 2009 12:00 PM BIO Become a Fan Get Email Alerts Bloggers' Index
Looking For Waste in the Health Care System? Try Anywhere

Read More: Health Care, Maggie Mahar, Mammograms, Medicare Fraud Cost, Pharmaceutical Industry, Simivastin, Vitorian, Zetia, Living News

How much of our rising health care costs comes from fraud in the health care system by players who know how to game it for their own benefit? Enough to cloud the reform debate, that's for sure. And it can't be pinned on one player; it's up and down the value chain in medical care.

On the one hand, you have the recent 60-Minutes report on drug dealers in Miami who defraud Medicare by opening fake clinics and pharmacies. They get reimbursed for artificial limbs ordered for patients whose IDs they have bought on a black market for Medicare information.

Further up the line you have hospitals who bill Medicare for procedures that could be done in an outpatient setting where they would cost less, or for total care of a patient whose actual care is split between two hospitals, both of whom bill for the entire care. (Go look on the Center for Medicare and Medicaid Services web site for the Recovery Audit Contractor pilot program in which this was discovered.

And then there's the sweetheart deal the insurers got to participate in the Medicare Advantage program, which was started when CMS was afraid not enough providers would participate in Medicare. In Medicare Advantage, all the players get paid more than by regular Medicare for providing the same services. Medicare Advantage is targeted by the cost-cutting initiatives, but here's what the plans said: "many commenters contend that, if rates are reduced, MA organizations will have trouble maintaining their provider networks, because they will have to pay providers less, and will have to raise premiums, increase co-pays and deductibles, especially in rural areas, Puerto Rico, in the case of Special Needs Plans (SNPs), PACE plans, and plans that are in direct competition with cost plans."

Finally, we get to the pharmaceutical companies, where we learn that "by suppressing negative studies, relentlessly pursuing positive trial results, and paying academic researchers to promote their therapy, Merck Schering-Plough has managed to hold onto a $4.6 billion market for a drug that has never been proven to be better than cheaper generics in preventing heart attacks or death. "

That's a pretty shocking allegation from the HealthBeatBlog, where Maggie Mahar, maker of the film "Money-Driven Medicine," does her investigative work. It seems that Merck Schering-Plough holds the patents on Vitorin and Zetia, two widely advertised drugs that in studies have proven no more effective than the vitamin niacin and a generic statin, simivastin.

And this doesn't even begin to touch controversial issues like outcomes-based medicine, which might mean fewer mammograms, CT scans, and other procedures that irradiate us often unnecessarily as the doctor either tries to prevent malpractice allegations or perhaps even owns the imaging center.

Everywhere you look there is waste and downright fraud in the health care system, perpetrated by both payers and providers, public and private. I have no doubt that Obama is right that we could fund health care reform by cleaning up the waste, but the lobbyists for the staus quo don't want it cleaned up. They are profiting from waste and fraud, not from legitimate services, IMHO

Comment

cuppajoe
I would suggest that it is not all just out and out fraud. Here, in a community of about 80,000 where I currently reside, one can go to one hospital for a specific lab test, and Medicare is charged about $225.00; In a second hospital in the same basic community, the exact same test, bills Medicare approximately $80.00 for the same test.

And, to further look at this, there are an estimated 5,000 of these tests performed in this community each month; it is estimated that the more expensive hospital performs 75% of these tests. If my math is correct, 75% of 5000 is 3750. and the difference between $225. and $80 is $145.00 $145 x 3750 = $543,750 per month, or $6,525,000 per year, for one test, in one community. If these numbers apply, even remotely to the national picture, this one test, which is necessary, may well be costing Medicare more than a BILLION dollars more than it need cost.

It makes no sense to me. The test does not require the intervention of, nor the direct supervision of a physician, uses an inexpensive test strip, and one nurse can comfortably accomplish, with no rush, about 4 or 5 tests per hour. Without any degradation of nurses, is it really necessary to bill medicare approximately $1000 per hour for a nurse's time?