For Pete’s Sake

This is from a Wall Street Journal editorial on the discovery that almost one-third of Medicare's medical equipment payments were improper or fraudulent.

Mr. Stark and his ilk consistently claim that Medicare is a model for government-run "universal" health care because it spends less on overhead than the private sector. True, Medicare's administrative costs are just 3% of total spending, while the private sector hits 11% to 14%.

Congressman Pete Stark

But insurance companies spend money to screen their claims for fraud. Medicare automatically pays more than 95% of the bills it receives. This lack of scrutiny reduces overhead, but it makes the program highly vulnerable to abuse. In June, a high-school dropout pleaded guilty to conning Medicare out of $105 million by submitting over 140,000 bogus claims before auditors noticed. It was the biggest health-care fraud in American history.

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