health
The flawed policies driving Medicare waste
Medicare hemorrhages about $60 billion a year in waste, fraud, and abuse — money lost from a program serving 69 million Americans. Fraud reflects deliberate deception, but much of Medicare’s waste stems from flawed policy and perverse incentives.
TL;DR
- Medicare loses about $60 billion annually to waste, fraud, and abuse.
- Much of Medicare's waste stems from flawed policies and perverse incentives, not just fraud.
- Traditional Medicare has higher improper payments ($28.8 billion) than Medicare Advantage ($23.7 billion).
- Traditional Medicare's centralized payment system with price controls leads to inefficiencies and provider incentives to increase service volume.
- The physician payment system, established in 1989, is described as arbitrary and politicized, subject to lobbying.