Report: Medicaid, Medicare Wasted at Least $55 Billion in 2009
Nov. 18, 2009 – U.S. taxpayers paid at least $55 billion more than necessary for federal Medicare and Medicaid programs during the 2009 federal fiscal year, according to a federal report released yesterday.
The report issued by the U.S. Office of Management and Budget indicates the federal government wasted a total of $98 billion on improper payments to third parties contracted to provide various federal services. Medicare and Medicaid programs accounted for at least $55 billion and more than 56 percent of total funds wasted by the federal government in 2009. The federal government wasted about $72 billion on all programs in 2008, according to the report.
While some might find alarming the reported amount of waste, a federal lawmaker says the actual amount wasted each year could be much greater.
“Unfortunately, these numbers may still be just the tip of the iceberg since they don’t even include estimates for several major programs, including the Medicare prescription drug plan,” U.S. Senator Tom Carper said in a statement. “It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits.”
The Office of Management and Budget report comes as federal lawmakers debate various health care reform measures in the U.S. House of Representatives and Senate. Medicare generally provides health care services for elderly U.S. citizens while Medicaid provides health care services for the poor.
The report indicated the error rate for payments made through the federal Medicare Advantage program increased by about 50 percent, rising from a 10 percent error rate in 2008 to a 15 percent rate costing about $12 billion in waste during fiscal year 2009. The Medicare Advantage program allows private insurers to provide Medicare coverage to qualifying individuals.
Some of the increase in wasteful spending is attributed to more stringent reporting requirements and increased government spending on federal programs due to the recent recession partly explain the increased waste in 2009, according to the federal report. Fraud also was cited among reasons for the increased waste, but federal officials said they have no idea to what extent fraud occurs.
Federal lawmakers are weighing various reform measures and penalties to reduce the amount of waste and fraud tied to Medicare, Medicaid and other federal programs. Penalizing individuals and organizations knowingly accepting improper payments for federally contracted services are among reform measures being considered, according to Reuters. Currently, no penalties exist for accepting improper payments, and federal law only requires funds be returned when excess payments are received.
Study: Medicare Patients, Uninsured More Likely to Die from Trauma
Nov. 17, 2009 – A recent study conducted by Harvard University researchers indicates Medicare patients stand a 56 percent greater chance of dying from traumatic injuries and the uninsured an 80 percent greater chance than their counterparts with traditional health insurance coverage.
Focusing on people suffering “unintentional injuries,” Harvard University researchers found auto accidents the number-one cause of unintentional injuries. Information on 2.7 million trauma patients was obtained from the National Trauma Data Bank for the years 2002 through 2006. Researchers then compared patients based on their age, race, sex, how they were injured and to what extent. Results then were compared based on the reported insurance status of patients.
“Unintentional injuries” rank among top 10 causes of death for every age group in the United States and is the top cause of death for Americans under age 44, according to the U.S. Centers for Disease Control and Prevention. The most common unintentional injuries are caused by vehicular accidents.
Results showed Medicare patients were 56 percent more likely to die from traumatic injuries than their counterparts, and people without health insurance coverage of any kind were 80 percent more likely to die after suffering traumatic injuries than those with health insurance coverage.
While significant differences seem to arise based on whether or not a patient had health insurance coverage, researchers acknowledge no direct correlation can be made between insurance status and survivability. In most cases, injury severity was the deciding factor.
Researchers speculated the severity of trauma rather than access to care was the primary reason people were more likely to die than others. Among young adults, gunshot wounds as well as auto accidents ranked among the top causes of traumatic injury. Because young adults are more likely to have no health insurance than older adults and they on average suffer much more life-threatening injuries, the severity of injuries suffered rather than access to health insurance is the main reason youth die more often from traumatic injuries, according to the Harvard University research team.
Among older Americans receiving treatment through Medicare, the higher mortality rate due to traumatic injuries likely stems from a greater likelihood of suffering from long-term, more debilitating illnesses and injuries, according to researchers.
While death rates from traumatic events among younger and older Americans without health insurance coverage are more readily explained, researchers suggest middle-age Americans without health insurance coverage tend to suffer more than their insured counterparts and die more often due to delays in obtaining medical care, lapses in treatments and other causes.
The federal Emergency Medical Treatment and Active Labor Act of 1986 ensures people seeking treatment at hospital emergency rooms are treated regardless of whether or not they have health insurance coverage. But when uninsured individuals suffer a traumatic injury, they often have complicating conditions that increases odds of dying from a traumatic injury, several medical professionals contend.
Report: U.S. Health Care Wastes up to $850 Billion a Year
Oct. 26, 2009 – As federal lawmakers wrangle over a proposed revamping of the U.S. health care system, Thomson Reuters today reported up to $850 billion is wasted each year, suggesting meaningful health care reform begins with tort reform and eliminating existing waste rather than expanding a flawed system.
The report authored by Thomson Reuters vice president of health care analytics, Robert Kelley, says between $505 billion and $850 billion are wasted each year on health care costs in the United States. The largest source of waste is a practice of over-medicating and overly treating patients to prevent potential medical malpractice, according to the report.
Because medical professionals are so concerned about being sued for medical malpractice, many will engage in unnecessary medical treatment, such as overly prescribing antibiotics and ordering useless laboratory tests, the report claims. And many health care providers refuse to share information on patients, often resulting in duplicate work being done. Up to $300 billion per year is wasted by medical professionals as concerned about avoiding a malpractice lawsuit as patient health.
The at least $700 billion cited as wasted every year amounts to about a third of total health care spending each year in the United States, according to Kelley. While the largest chunk generally is wasted on useless medical procedures, fraud accounts for the second-largest portion of health care waste in the United States with an annual tab of about $200 billion, according to the Thomson Reuters study. Fraud generally occurs in the form of fake Medicare and Medicaid claims and medical professionals being paid bribes for performing useless medical procedures and prescribing useless drugs, among other forms of fraud.
Although no dollar amount was affixed to it, the Thomson Reuters study suggests about $150 billion in annual health care system waste arises from administrative inefficiency and duplication of paperwork. The report claims U.S. hospitals on average spend about one-fourth their annual budgets on administrative costs – about double the average in Canada.
Medical errors account for between $50 billion and $100 billion in annual health care waste. And the failure to preventively treat diabetes and similar afflictions costs between $30 billion and $50 billion per year, according to a 2003 study conducted by Harvard University researcher Dr. Steffie Woolhandler.
The Thomson Reuters’ study was conducted recently by its health care analysis unit and culled through several years’ worth of health care studies and reports.
With about a third of the annual health care costs in the United States arising from waste, the Thomson Reuters report clearly illustrates the need for cleaning up the current system rather than expanding it to cover tens of millions more Americans. If the waste can be reduced, most likely more Americans would feel better about federal lawmakers promising to lower costs while further extending a blatantly flawed national health care system.