The Wonkonians strike back 

Considering the recent doings of the Gekkonians, by now we might feel quite sympathetic toward the Wonkonian notion that our healthcare problems would best be resolved not by free market economics, but by new and better regulations. We might even be cheered by the fact that the Wonkonians have not just been sitting idly by these past few years, wringing their hands in despair and wishing things had turned out differently.  Indeed, this time has been very busy and fruitful for them.

Unfortunately, in practice the Wonkonians threaten to do at least as much damage to our healthcare system, to the doctor-patient relationship, and to fundamental American principles as the Gekkonians.  In the service of covert rationing the regulatory imperative, like the profit imperative, takes on a life of its own, and completely overwhelms the healthcare system's mission to operate for the public good.

The anti-fraud imperative

In his 1994 State of the Union Address, President Clinton, still fighting hard for passage of his healthcare reform initiative, declared dramatically that that our healthcare system "is riddled with inefficiency, with abuse, with fraud, and everybody knows it."  This line gained him a huge bipartisan round of applause. And why shouldn't it?  Everybody hates abuse and fraud in healthcare.

The mandate to root out fraud in the healthcare system is an extraordinarily powerful one.  Everyone agrees that healthcare fraud is an inexcusable crime, and believes that perpetrators of real fraud should be tracked down vigorously and prosecuted fully.

Until the mid-1990s, however, federal programs like Medicare were very lax about fraud detection, and did not have the will or the systems in place to look for fraud.  Thus, it was relatively easy for unscrupulous individuals to get away with even the most obvious fraudulent practices.  Many scam artists, organized crime syndicates, and drug-related money launders saw the $250-billion-a-year doled out by Medicare as a huge pot of unguarded money.  This historic laxity with public funds is inexcusable, and efforts to get tough with fraud should be and are a priority.

Unfortunately, the anti-fraud imperative also presents an irresistible opportunity for the Wonkonians to gain control of physicians' behavior, and thus of the healthcare system, through the regulatory process. The anti-fraud program that is being put into place today is virtually guaranteed to prevent doctors, whether they're committing fraud or not, from making the patient's needs their paramount concern.  Physicians who don't keep the wishes of the regulators at the top of their list of priorities are risking everything.

Why fraud sells

Even aside from the simple fact that fraud is dishonest, deceitful and illegal, there are good reasons that the very idea of healthcare fraud provokes such a visceral reaction in most of us. For one, fraud is expensive. The government traditionally argues that of all the hundreds of billions of dollars they spend each year on healthcare, 10% is siphoned off by fraud. (This oft-quoted figure, despite its now-iconic status, is highly suspect. It originated with a 1992 General Accounting Office report, which clearly identifies the 10% estimate as deriving from an average of the educated guesses of an undisclosed number of unnamed individuals. But at least the guesses are said to be educated, so we will go with it.) Especially at a time when the costs of healthcare are skyrocketing, anything that inappropriately diverts money out of the healthcare system is particularly reprehensible.

Finally, there's an even more compelling reason for much of the angry talk about fraud - namely, the idea that if we don't root out this fraud, we may have to ration healthcare.  This notion follows directly from the fact that, as we saw earlier, there are only two ways of reducing the amount of money we spend on healthcare; eliminating waste and inefficiency (e.g., eliminating fraud), or rationing.  So if we don't want to ration, we'd better find lots of fraud to eliminate.

In fact, because finding fraud and rationing are inversely proportional (i.e., the more fraud we find, the less rationing we'll have to do), we have a deep and abiding need to find fraud under every rock.  We are more than ready to believe there is a lot of fraud out there, and more than ready to use drastic measures to find and punish it.

The Wonkonians, of course, are ready to match our zeal ounce for ounce.  Accordingly, fraud has become their focal point for instituting aggressive regulatory action in healthcare.

For physicians like myself, this scene has some very ugly overtones.  For there's a substantial difference between trying to identify and root out real fraud, and defining fraud in such a way as to be able to find as much as you can (because the more fraud you find the better off society is).  Unfortunately, the Wonkonians' anti-fraud efforts are shaping up to look more like the latter than the former.

Interpreting the anti-fraud activities of the government over the past several years will inevitably be colored by one's own outlook and prejudices.  An individual who is inclined to view government as essentially benign and well-meaning can look at the sum total of those anti-fraud activities and conclude that in general they have been reasonably constrained.  One who is inclined toward the opposite view of government can look at those same activities and see things that are deeply disturbing.

I am going to argue that, even if you are inclined toward the former view, you need to begin taking into account the fact that covert rationing corrupts everything it touches.  The anti-fraud imperative presents to the Wonkonians opportunities for abuse that, under a covert rationing paradigm, become irresistible. The clearest and most common technique employed by Wonkonians in abusing the anti-fraud imperative is one I call the Regulatory Speed Trap.

Note: My view of the Wonkonians' anti-fraud activities has been deeply influenced - though, I submit, not invalidated - by my own personal experience.  For those of you who may be interested, I offer my own story - How DrRich Got Radicalized - here . I do this partly to show one example of how the Wonkonians are capable of behaving, and partly in the interest of full disclosure - to give you some indication of my frame of mind as we explore together the ultimate implications of their anti-fraud imperative.