By MATTHEW HOLT
Two weeks in the past I wrote an April Fool’s piece that claimed that Elon Musk and DOGE were going to nationalize American health care to avoid wasting cash. That piece was half-joking however full-serious.
When you have a look at what Musk is complaining about there are two main areas of “waste, fraud and abuse” in authorities spending.
One is individuals instantly employed by authorities companies. Most people I’ve ever met in authorities work rattling onerous and for a lot much less cash than they’d get within the personal sector. However you’ll be able to after all discover tales about useless government bureaucrats, who don’t do any work and pad their expense accounts. These tales are in all probability about as true as Reagan’s pink Cadillac driving welfare queen in that there’s some foundation in actuality for there being a tiny minority of dangerous actors, however the politics has far outrun the reality. (BTW that Welfare Queen article by Josh Levin in Slate is exceptional and very lengthy!)
The opposite main space the place Musk claims to be discovering fraud is in work contracted out. There are after all a number of sorts of authorities work contracted out. If, like me, you’re sufficiently old to recollect the Iraq conflict, you in all probability are considering of beltway bandits like Halliburton supplying any variety of companies to the navy. (Bear in mind when the Cheneys have been baddies?). One other is the Blue Cross & Blue Defend plans who have been the unique contractors processing Medicare & Medicaid claims. Funnily sufficient they couldn’t really ship on that so in flip they outsourced it to Ross Perot at EDS and others like ACS, later Conduent. However there’s a ton extra throughout each company.
Musk & DOGE have been working round in essentially the most ham-fisted approach possible, axing each precise workers–together with 20,000 of the 80,000 working at HHS– and allegedly slashing $150 billion in contracts. In fact on nearer examination, most of the “contracts” were already over, or were made up. DOGE has been a pathetic piece of efficiency artwork that will be humorous if it hadn’t ruined so many careers of people doing great work, or killed so many desperately poor children in poor countries.
The intelligent individuals at Brookings, (Elaine Kamarck and Paul Light) in a detailed piece on the topic, got here up with an estimate of the ratio between direct workers and contractors.
As you’ll be able to see the variety of civil servants (precise workers) has stayed about 2m for practically 15 years. The quantity of contractors has bounced round however been practically 2.5 instances that quantity.
For the 4-5m jobs within the contract sector GAO has estimated that the 2023 price was a tad below $800 billion a yr, with 60% of that going to Protection.
Nevertheless, there’s a third class of presidency “contractors”. These are personal corporations offering companies to personal people for whom a 3rd occasion is paying. Typically the third occasion is the federal government, like CMS paying Medicare claims. Typically it’s a personal entity like an employer paying one other one, like a hospital–however the prices are backed on each side by the federal government. Or generally the identical transaction is each paid for by the federal government and a personal particular person, akin to Medicare paying for some prices whereas a personal Medigap plan pays for the remainder.
Musk and DOGE have mainly ignored this.
You may see the place I’m going right here.
These aren’t “contracts” and so they don’t present up within the GAO’s evaluation. In the event that they did the entire could be nicely over $2 trillion in well being care alone. However they do signify authorities spending.
And every single day in well being care there’s information about ways in which personal corporations are being “over- compensated” for what they supply for that spending.
I’m not even going to speak about United HealthGroup and Medicare Benefit right here. In any case, even the Trump DOJ seems to think they’re guilty of upcoding and fraudulent danger adjustment.
However there’s loads of different examples
Caught with its hand within the cookie jar final month was the nation’s greatest Medicaid plan, Centene. Medicaid is a state-based program, so if somebody strikes from one state to a different, the state and Federal authorities are alleged to cease paying the Medicaid plan in a single state, and as an alternative pay the plan in one other. Centene after all is aware of this, however the WSJ discovered that it was telling its local plans not to inform the state that its members had moved away.
One Centene supervisor urged among the firm’s case managers in February to maintain Medicaid recipients enrolled after they moved. “Please DO NOT shut circumstances whenever you be taught a member has moved out of state,” the supervisor mentioned in a Microsoft Groups message. “If the member reveals eligible and are out of state, they will nonetheless can [sic] make the most of among the advantages.” Centene’s spokesman mentioned the corporate is required to keep up protection for members till the state decides whether or not to disenroll a beneficiary.
Centene was accumulating about $150m a yr for these sufferers who weren’t even dwelling in its protection space, and mendacity to the taxpayer about it. The WSJ makes clear that they weren’t alone. United, AetnaCVS, Molina and Elevance have been all doing the identical factor. Good pure revenue if you may get it!
In semi-related information, among the extra corrupt states are becoming a member of in. As an illustration, Centene paid a $67m nice in Florida for overcharging Medicaid for its PBM companies. Presumably that cash ought to have gone again to the Florida taxpayer, however the regime in Florida told Centene to give $10m of that money to a dark money public “charity” that’s the pet challenge of its founder, a Ms. Casey DeSantis. Who apparently is married to the governor of Florida and wish to be the following one!
Look I do know you’re all shocked that Florida Republicans and their pleasant lapdog firms are concerned in this sort of corruption, nevertheless it’s attainable that one thing not too dissimilar is going on within the blue collar Democratic stronghold of Pittsburgh, PA.
There we discover one other kind of presidency “contractor”, the College of Pittsburgh Medical Middle. UPMC has been constructing an empire for many years. I’ve written about its major league baseball style executive salaries, and others have exposed its corporate jets. However whereas UPMC has all of the affectations of an enormous for-profit company, Beckers experiences that 70% of its income comes from authorities packages. However what benefit does being a non-profit carry for UPMC that the remainder of Pittsburgh residents don’t obtain? Yup, no have to pay property tax. On the $2.1 billion-worth of land they personal.
So when the mayor of Pittsburgh comes asking for the city’s share, UPMC isn’t precisely taking the excessive street.
To guard its standing, the hospital big is placing its thumb on the dimensions in Pittsburgh’s hotly contested mayoral race, wherein the democratic main election is going down on Could 20. The incumbent, Ed Gainey, was elected in 2021 and has been a vocal critic of the medical middle’s growing portfolio of tax-exempt properties, alleging that the middle is misusing its nonprofit standing by granting tax exemptions to ineligible properties. The progressive mayor is going through a stiff problem from County Controller Corey O’Connor, who’s working because the top choice of the Pittsburgh improvement and actual property communities, raking in money from native actual property moguls, longtime Republican donors, and notably, hospital board members. That features board members of the College of Pittsburgh Medical Middle and its related Kids’s Hospital Basis. All collectively, these members and their households have contributed not less than $25,000 towards O’Connor’s mayoral marketing campaign to this point this yr, in accordance with campaign finance records.
This doesn’t strike me because the habits of a worthy impartial charitable group, and albeit neither does the habits of many different main well being care programs. To quote myself (yeah, yeah, I do know its nonetheless plagiarism),
Over the past 30 years America’s venerable neighborhood and parochial hospitals merged into giant well being programs, largely to have the ability to stick it to insurers and employers on worth. Blake Madden put out a chart of 91 health systems with greater than $1bn in income this week and there are about 22 with over $10bn in income and a bunch extra above $5bn. You don’t want me to remind you that lots of these programs are responsible with excessive prejudice of monopolistic price gouging, screwing over their clinicians, suing poor people, managing huge hedge funds, and paying dozens of executives like they’re enjoying for the quickly to be ex-Oakland A’s. A number of received LA Dodgers’ style money.
Notably galling is the amount of cash sloshing round of their hedge funds. I’ve made a really, very tough estimate that there’s in all probability $500 billion within the “reserves” of the massive hospital programs and the non-profit Blues plans, nevertheless it is perhaps $1 trillion.
So what’s my reply?
Nationalize the lot of them.
If the hospitals and docs have been a part of authorities companies just like the VA or the US Marine Corps, all of this theft and corruption would both disappear, or be managed by OIGs and others.
There’d be no want for them to have these hedge funds. Or the funds to personal insurance coverage corporations. That cash could possibly be used for good fairly than revenue.
Salaries could possibly be adjusted to mirror these paid to excessive paid public sector workers. If the President of the USA will get $400k a yr, why does the CEO of a regional medical middle want $14m? For that matter a clinical service line head at the VA could make as much as $400k a yr, which doesn’t sound loopy low. Clearly there must be a ton of changes which might in all probability embody making medical faculty free, however total being a doctor would nonetheless be a excessive paid career–as it’s in the remainder of the world. And we might return to them a ton of energy and autonomy that has been stolen from them by well being plans and directors.
Now I do know it will come as an anathema to most People. They’ll appropriately say that SpaceX (regardless of Musk being its nominal CEO) was capable of put rockets in orbit much cheaper than NASA did.That could be true in lots of areas of the financial system nevertheless it’s not true in well being care. We spend approach, far more per head than nations with government-delivered programs.
Lastly, a nationalized well being system would allow us to take away among the greatest inequities and idiocies in our present authorities based mostly insurance coverage system. Exhibit A is Medicaid. Having one Federal authorities program for individuals over 65 and the disabled (Medicare) and a completely completely different state-based one (Medicaid), which spends 1/2 of its cash on people who find themselves over 65 and disabled and who’re additionally within the Federal program is obvious silly and all the time has been.
A nationalized system would take away the second class standing of the ⅓ of our residents who don’t have Medicare or good personal insurance coverage, and would allow our medical professionals to observe medication the best way they needed to once they have been younger and idealistic.
Clearly getting American well being care from right here to there through nationalization–a British phrase from the Nineteen Forties that hardly has any that means right here–is near inconceivable.
However inform me it isn’t the suitable factor to do. Even in case you solely care about decreasing waste, fraud and corruption.
Matthew Holt is the Founder, Writer and an Writer at THCB
