Why Are the Feds Willing to Pay the Cost of Fraud?

Kathleen Sharp tells a good, if scary, story. In “Blood Feud: The Man Who Blew the Whistle on One of the Deadliest Prescription Drugs Ever,” she describes how two Big Pharma companies conspired to develop and market an anti-anemia drug despite evidence of devastating side effects.

In a recent op-ed in the New York Times, she argues that scarily rampant fraud in health care is partly the fault of the feds. The Obama administration announced plans to cut $320 billion over 10 years from the projected growth of Medicare and Medicaid by raising premiums and deductibles, lowering payments to providers and requiring recipients of home health care to make co-payments.

But, Sharp asks, what if instead of charging consumers more and eliminating services, the focus was on diminishing the estimated $100 billion that’s lost every year from these programs in the form of fraud? And the additional 150 billion fraudulent dollars collected in the rest of the health-care industry?

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