The media regularly report about how health care costs are rising at an unsustainable rate. Well, here are some of the numbers. According to the federal government’s estimates, health care expenditures in the United States are approaching or exceeding $4 trillion per year and account for more than 18% of gross domestic product. In 2019, Medicare spending was $800 billion, and Medicaid accounted for more than $613 billion. In New York state, Medicaid expenditures for fiscal year 2021 are projected to hit more than $80 billion.
Payments by government programs, insurers and managed care plans, self-insured benefit programs, and other payors flow to all segments of the industry: hospitals; nursing homes; clinics and other institutional providers; clinical laboratories; physicians and other medical professionals; pharmacies; drug and medical device companies; and so on. Yet compared to total expenditures, the amount of auditing of these expenditures is miniscule. As a result, problems ranging from simple billing errors to outright fraud are rampant and often go undetected, adding unnecessary costs to what is by far the world’s most expensive health care system.