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Profit dwarfed by fraud

Posted: December 13, 2009 10:12 p.m.
Updated: December 14, 2009 4:55 a.m.
 
I hear some folks decry “greedy” health insurance companies, whose profit lines average 6 percent (which, by the way, is less than farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands, most other forms of insurance and Yahoo, just to name a few).

But do they ever mention that amount is dwarfed by the much, much larger fraud experienced by “non-greedy” government plans like Medicare and Medicaid?

Without profit incentives to curb fraud, government systems experience 13.3 percent fraud, compared to 3.12 percent for private insurers.

So, would you rather pay 6 percent in profit (which spurs innovation and lower prices) or 10 percent in fraud (which does exactly the opposite)?

Add to this the fact that government plans reject more claims than private insurers and the case against government plans is even more clear-cut.

On top of this, add the low reimbursements and delays to doctors and it’s no wonder physicians increasingly pass on taking new government-paid patients.

Indeed, the government option in medicine speeds taxpayer dollars into the hands of crooks, stalls payments to honest doctors and stymies innovation with waste and top-down mismanagement.

Unsurprisingly, this kind of destruction has to be forced through by law: it could never survive the test of free consumers.

Now, just imagine how much more the government option could accomplish with a trillion dollars and an appetite for one-sixth of the U.S. economy.

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