I’ve been following the assorted discussions of easy methods to lower the scale of presidency.
Elon Musk, one of many cutters, needs to scale back the variety of workers within the federal authorities. This could usually make sense.
There’s one space, nonetheless, by which chopping the variety of workers would in all probability enhance authorities spending: Medicare.
Many individuals who favor Medicare inform us that one motive 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 actually 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 actually enhance.
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 further 100 Medicare workers, if they really labored, would lower fraud by $1 billion. So if the outlay per worker, all in, together with pensions, and so on., have been $200k per 12 months, a further 100 workers would price $20 million. Let’s say I’m incorrect and it takes 500 further workers to chop fraud by $1 billion. Then that’s an expenditure of $100 million to avoid wasting $1 billion. In fact, fraud is less complicated to catch on the present margin than at further-out margins. However I might guess the federal government may spend below $1 billion on workers to chop fraud by $10 billion.
