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Ken Jeffries

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Can we lower the cost structure of healthcare or other industies by minimizing the systems they have put in place to guard against abuse?

It appears to me that many industries have put overly cumbersome and expensive systems in place to ensure no one gets an "free ride" via cheating and dishonesty. I believe the vast majority of people are honest, sincere, and would not cheat even for their own benefit. How much cost and inefficiencies are we incurring to "catch" the few abusers out there? Many industries and the media focus on cases of abuse and by doing so inflate the severity of the problem. This has led to a structure where the customer of the service is assumed guilty first and must prove they are entitled. Yes, there will be those who abuse but systems should not be focused on abuse. It is a major distraction from the reason for the industries existance... delivering service.

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  • David Manheim 10+

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    May 16 2011: The systems in place could certainly stand to be reviewed for efficiency, but that doesn't mean they are unnecessary. One estimate puts the current cost of medicare fraud at $60bn/year. (http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390_page2.shtml) As you say, the vast majority of people are honest - but the fraction of a percent that are not can easily cost the system a majority of the money if nothing to prevent fraud is in place.

    The current outlay of the DOJ for the programs to prevent fraud are between $200-$300m / year, and have recovered $4bn / year in fraudulently obtained money. If you want to save money in the system, the most efficient way to do it on a dollar for dollar basis without fundamental changes is to increase the spending on these programs that have a return on investment of 15-20x. (see: http://fraudblawg.com/2011/01/06/additional-60-2-million-added-to-doj-budget-for-health-care-fraud-abuse-prevention/)

    So the system to prevent fraud doesn't work well, and while there presumably are better way to run it, the minority of abusers do in fact make the system much more expensive. So what are the tradeoffs? That's Schneier's question.
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    Debra Smith 200+

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    May 7 2011: There is a TEDX talk that i will try to post the link to. It is about Asia and variety of issues but in it the speaker refers to eye surgery in Asia that studied the business model and fast food delivery of MacDonalds and using that model they reduced eye surgery to the cost of $4 each. It can be done. The quesiont is: is there the will?

    This is the link to the TEDx talk but I do not remember at which point in the video this is mentioned.

    http://youtu.be/eaQdOT9ryi8

  • Ernestas Radvila

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    May 7 2011: But if we wont watch and punish those who cheat, then cheating rate just skyrocket. Feeling that system is secured from cheating is the key here. Also, most of these security systems pay off for itself in the long run.
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