As I watched the political brinksmanship over the last several weeks with the government shutdown that brought the Treasury close to default, I couldn't help but think of Stanley's Kubrick's Dr. Strangelove: Or How I Learned to Stop Worrying and Love the Bomb, the classic black comedy about the unthinkable: nuclear holocaust. Congress seemed hell-bent on doing its best imitation of the errant B-52 piloted by the crazy Major Kong (a Texan no less -- sound familiar?) which flirted with and then far surpassed the Fail Safe point as it hurtled towards an economic Armageddon.
The recklessness and fecklessness of our political class has reached staggering and epic proportions. The shutdown debacle cost taxpayers at least $24 billion, which does not even count the $3 billion Kentucky dam that was the price for Mitch McConnell's last-minute assent.
On Tuesday, the Taxpayers Against Fraud Education Fund (TAFE Fund) released a report on one of the few areas where the government seems to actually be making a wise investment, the pursuit of fraud. The TAFE Fund study highlighted the benefits of False Claims Act legal actions in the healthcare field, a $2.8 trillion dollar industry that is the country's largest and most abuse prone. The report revealed the effectiveness of civil healthcare fraud enforcement, which is generating recoveries of at least $20 for every dollar spent on enforcement. This is more than double the rate revealed by the first TAFE Fund report in 2001.
Think about that: a benefit-to-cost ratio of 20:1. What other government-linked program can claim such efficiency? Certainly not Congress.
The TAFE Fund report, it acknowledges, likely underestimates the true efficiency of False Claims Act law enforcement, as it does not account for the deterrent effect of the legal actions brought under the Act. According to the report, "Major settlements with large recoveries have a ripple effect that reduces the likelihood of similar fraud against federal and state health care programs."
The deterrent effect, the TAFE Fund report speculates, likely has the effect of substantially multiplying the rate by which tax monies looted by healthcare fraudsters are clawed back. Recoveries are up because federal and state authorities, spurred by the actions of whistleblowers, have increased their investigations of healthcare fraud, particularly within the pharmaceutical industry. Judgments involving Medicare and Medicaid fraud have soared, as have criminal penalties.
While the Department of Justice and other government organizations pursuing whistleblower claims generate hard cash for the Treasury, irresponsible politicians fritter it away. Pardon the clichés, but these mindboggling antics are worthy of Biblical descriptions, because "the left hand doesn't know what the right hand is doing" and "one hand giveth, and the other taketh away."
What we taxpayers need to do is start slapping at the hand that throws our money away and encourage the hand that can it claw it back. The government needs to start investing its own resources wiser, which means focusing on the fraud and waste that is responsible for so much of our nation's fiscal façade.
Healthcare was the battleground over which Republicans fought Obama and the Democrats and which caused the government shutdown and near default. While that partisan battle likely will continue, both parties should embrace the opportunity to reduce healthcare system costs by battling waste and fraud. The Affordable Care Act's expansion of Medicaid to cover those lacking health insurance has vastly expanded opportunities for fraud, making the False Claims Act even more vital to the financial health of our country.
The increased efficiency and effectiveness by which the government has pursued fraud is one of the few governmental accomplishments that we can celebrate at the moment. Unfortunately, it's sad that fraud is so rife in the healthcare field, an industry that has come to play such a pivotal role in our economy, sad that so many tax payer dollars are being wasted by unscrupulous behavior. What's even sadder is that more members of Congress are not talking about keeping the pressure on fraudsters and using it as a bipartisan tool to improve our finances. Instead, too many are talking about the next borrowing limit deadline in February and the next round of political brinksmanship.
It's a no-win situation that any fan of Stanley Kubrick's classic should find disturbingly familiar.