I’ve been following the varied discussions of the way to lower the scale of presidency.
Elon Musk, one of many cutters, needs to cut back the variety of staff within the federal authorities. This could typically make sense.
There’s one space, nonetheless, through which chopping the variety of staff would in all probability improve authorities spending: Medicare.
Many individuals who favor Medicare inform us that one purpose it’s so nice is that administrative prices are decrease than for the everyday personal medical health insurance firm. Administrative prices are decrease. However that doesn’t imply Medicare is extra environment friendly. It’s virtually definitely much less environment friendly and the reason being fraud. With few directors, quite a lot of fraud goes unnoticed or unaddressed. If the variety of directors have been lower even additional, fraud would virtually definitely improve.
By one estimate, the quantity of fraud in Medicare and Medicaid is over $100 billion a 12 months.
I believe it’s credible that each extra 100 Medicare staff, if they really labored, would lower fraud by $1 billion. So if the outlay per worker, all in, together with pensions, and so forth., have been $200k per 12 months, a further 100 staff would value $20 million. Let’s say I’m flawed and it takes 500 extra staff to chop fraud by $1 billion. Then that’s an expenditure of $100 million to avoid wasting $1 billion. After all, fraud is simpler to catch on the present margin than at further-out margins. However I might wager the federal government might spend beneath $1 billion on staff to chop fraud by $10 billion.
