Tuesday, April 22, 2014

Why you will always have dead people on the Medicaid and welfare roles

Illinois has spent $12M on Medicaid for dead people:
A Freedom of Information Act request from the Associated Press uncovered a shocking memo from the Illinois state auditor. The AP found that the Land of Lincoln spent millions of dollars on medical services for the dead.
The Illinois Medicaid program paid an estimated $12 million for medical services for people listed as deceased in other state records, according to an internal state government memo.


“It’s disappointing and somewhat enraging for taxpayers, but it’s not surprising,” Righter said. “I wish this administration would spend more time trying to solve the problems rather than trying to convince taxpayers that they’ve already solved them.”
Never going to happen.  The reason is the incentive structure of the organizations.  Consider a private insurance company: there's a clear incentive to identify people not entitled to receive benefits, as this will directly increase the bottom line.  There's a scoring system in place that, while by no means perfect will cause the institution itself to police the roles of the eligible.

Now think about the government agency that is responsible to Medicaid.  What's their organizational incentive?  It's to maximize the number of people on Medicaid.  This isn't just job security, but it's the organizational mission and over time the bureau will staff itself with people who are enthusiastic about the mission.

And so, Dear Reader, why would anyone expect the government to police the Medicaid roles?  Who wants to do that?  Who gets ahead in their career by doing that?  The incentive structure ensures that money will be wasted in fabulously huge amounts.  In fact, the bureau will do everything in its power to ensure that this waste is not reduced:
Republicans have pressed for the state to use a private company to verify Medicaid eligibility. Maximus Health Services was hired to scrub state Medicaid rolls following 2012 Medicaid-reform legislation. Republicans have said the company was achieving a Medicaid eligibility-removal rate of 40 percent.

But the contract between the company and Gov. Pat Quinn ended last year, and the work was shifted to state employees, after the state’s largest public-employee union objected and an arbitrator ruled the contract should end.
It's so cute to listen to Progressives about how government is the only one who can be trusted to supply critical services.


daddybearsden.com said...

Your winnings, Monseur.

I wonder how many of those deceased Medicaid recipients also voted. I'm guessing they might be a crucial constituency.

Dave H said...

Like they say in the consulting business, "If you're not part of the solution, there's money to be made by prolonging the problem."

What we need is a government whose first priority is to put itself out of work. If they could permanently solve the kinds of problems governments are supposed to solve, I'd gladly help pay them a massive bribe to quit afterwards.

Old NFO said...

+1 on Dave H, and that is the damn truth... Getting rid of ANY bureaucracy is damn near impossible, as is any downsizing of the same...

drjim said...

Yep, they're the closest thing to Perpetual Motion devised yet!

newrebeluniv said...

I am just wondering about the timing. I can easily see 12 million as the cost of paying the final medical bills of people who were alive but died before the bill was processed. The payment is actually to a doctor or hospital that performed legitimate treatment where the patient died soon after.

I am not arguing that there is plenty of fraud and abuse in this system, just wondering if this is really an example of it or a misinterpretation of the data. If i had the raw data, I could dig into this.