A doctor is a simple creature. He measures achievement by a straightforward standard – the Hippocratic Oath.
A businessman also measures success by a simple standard – money, income and outgo.
But a bureaucrat has the misfortune of breathing and walking in the murky world of insider politics. Which is like no other world on earth.
State Bureaucrats who work for state government run the program, but Washington pays most (roughly 2/3rds) of the bills.
And, awhile back, some well-intentioned soul, I guess in Congress, decided if the bureaucrats in Raleigh mismanaged Medicaid and wasted Washington’s money the state should pay the money back.
Which sounded fine. It sounded like ‘accountability’ in the normal world.
But, in politics, ‘accountability’ led to an unintended consequence.
The other day the News & Observer reported the State Auditor had reviewed a sample of 280 Medicaid claims and found $439,000 in overpayments.
That doesn’t sound too bad – but, in fact, last year the state paid 88 million Medicaid claims. So if an audit of 280 claims turned up $440,000 in waste – what on earth would an audit of all the claims turn up?
The answer is no one has a clue. Not the State Auditor. Or the Secretary of Health and Human Services. Or the Governor.
And there’s a simple reason why: That well-intended law someone in Washington passed years ago.
Follow the math.
If an audit (of the entire Medicaid program) found, say, $500 million in waste the state would be out its third of the money – $167,000 million. And it’d probably never see that money again.
But, in addition, the state would have to repay Washington for its 2/3rds of the money – $333 million.
So, in all, the state’s out a total of $500 million.
On the other hand, if the state does nothing, and doesn’t look for any waste, it doesn’t have to repay Washington a penny. It’s still out $167 million. But that beats being out $500 million. And that’s where the law of unintended consequences comes into play.
Naturally, no bureaucrat in state government is set on rooting out the waste in Medicaid.