I’ve been following the varied discussions of lower the scale of presidency.
Elon Musk, one of many cutters, needs to scale back the variety of staff within the federal authorities. This could usually make sense.
There’s one space, nonetheless, by which reducing the variety of staff would in all probability enhance 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 non-public medical health insurance firm. Administrative prices are decrease. However that doesn’t imply Medicare is extra environment friendly. It’s nearly definitely much less environment friendly and the reason being fraud. With few directors, a number of fraud goes unnoticed or unaddressed. If the variety of directors had been lower even additional, fraud would nearly definitely enhance.
By one estimate, the quantity of fraud in Medicare and Medicaid is over $100 billion a yr.
I believe it’s credible that each further 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 on., had been $200k per yr, a further 100 staff would price $20 million. Let’s say I’m flawed and it takes 500 further staff to chop fraud by $1 billion. Then that’s an expenditure of $100 million to avoid wasting $1 billion. After all, fraud is less complicated to catch on the present margin than at further-out margins. However I might wager the federal government might spend below $1 billion on staff to chop fraud by $10 billion.
