Category: Government

When DOGE fired federal workers we saw televised scenes where the fired workers expressed outrage at how taxpayers would be hurt by the loss of devoted civil servants. So where were the devoted civil servants in 2023? Were they doing their jobs to be alert to the Medicare, and personal identity, fraud that cost the public about 10 billion (that is “billion” with a “b”) dollars?

When Elon Musk’s DOGE uncovered myriad examples of major fraud, I saw Democrats on television complain that of course they were against fraud too, but it should be pursued more slowly and systematically, following traditional procedures. The Democrats were running the federal government in 2023. What procedure were the Democrats using, fast or slow, to protect taxpayers from the fraudulent loss of 10 billion (that is “billion” with a “b”) dollars?

Our jerry-rigged government-run-and-regulated health care system is rife with middlemen. In a true free-market healthcare system, patients would directly pay for healthcare, without middlemen. Patients would have the information, and the incentive to act on the information, to detect, report, and pursue fraudsters. Some fraud would exist under any system, but my hypothesis is that much less of it would exist under a free-market system.

(If you are concerned that patients would not have enough funds to pay for healthcare themselves, we could adopt the much better insurance system once proposed by Susan Feigenbaum, combined with deregulation that would reduce healthcare costs–like no longer mandating Phase 3 clinical trials.)

And my secondary hypothesis is that if we have to have a jerry-rigged government-run-and-regulated system, the Republicans, a party full of former bourgeois entrepreneurs and business managers, will usually do a marginally better job of detecting and pursuing fraud.

I wonder if these hypotheses have ever been researched by any of those noble economists studying the field of Public Choice?

(p. A18) When hundreds of thousands of people enrolled in Medicare were billed for expensive medical equipment they never asked for in 2023, it was part of a $10.6 billion fraud, among the largest such schemes in the program’s history, federal prosecutors said this week.

. . .

Those involved in the fraud bought dozens of companies that were accredited to submit claims to Medicare and the program’s supplemental insurers, prosecutors say.

Then, using personal information stolen from more than a million Americans, the defendants filed billions of dollars in claims for equipment that had not been ordered by people enrolled in Medicare and was not delivered to them, according to the indictment.

Of the $10.6 billion that was fraudulently billed, the indictment says, the defendants collected more than $900 million, most of it coming from private “Medigap” insurers and the rest from the Medicare program itself.

Even if the patients themselves did not pay for the phantom supplies, which included urinary catheters, braces and other durable medical equipment, such schemes can affect Medicare recipients by causing premium costs to rise.

. . .

In 2019, the Justice Department uncovered a scheme that it said had defrauded the program of more than $1 billion with phony claims for back and knee braces. In April 2023, prosecutors charged 18 defendants in a nearly $500 million scheme that involved false billing for Covid-19 tests that were never administered.

For the full story see:

Santul Nerkar. “11 Accused of Medicare Fraud In Scheme Based in Russia.” The New York Times (Sat., June 18, 2025): A18.

(Note: ellipses added.)

(Note: the online version of the story has the date June 27, 2025, and has the title “U.S. Charges 11 in Russia-Based Scheme to Bilk Medicare of $10.6 Billion.”)

The better healthcare insurance system proposed by Susan Feigenbaum was proposed in:

Feigenbaum, Susan. “Body Shop’ Economics: What’s Good for Our Cars May Be Good for Our Health.” Regulation 15, no. 4 (Fall 1992): 25-31.