Curbing waste, fraud, and abuse won't eliminate the deficit, but it can save the government tens of billions of dollars every year and avoid cuts elsewhere. What's more, the federal government is already making big gains in this area that have attracted little notice -- and the Obama Administration has been especially aggressive on this front.
The biggest low hanging fruit is Medicare and Medicaid fraud. Rampant overbilling and defrauding of these programs costs taxpayers up to $40 billion a year -- with some figures ranging much higher. Some of the costliest frauds have been perpetrated by leading pharmaceutical companies, which have misled public healthcare programs about the actual cost of prescription drugs and conspired with doctors to systematically overcharge the government for drugs. (These schemes allow Big Pharma to offer fat financial rewards to doctors who prescribe their drugs.) It used to be the defense industry perpetrated the most fraud against the U.S. government; now it is Big Pharma.
But, for nearly a decade now, federal and state authorities have been trying to stop such fraud -- with some success. According to an authoritative study by Public Citizen, the government has settled 80 cases with pharmaceutical companies accused of overcharging public healthcare programs since 1991, with most of those settlements in recent years. All told, these companies have paid $2.3 billion penalties in such cases -- and many billions more to settle other charges.
This crackdown on Big Pharma started during the Bush years, but the Obama Administration has ramped up the pressure. Absurdly, as I have written elsewhere, not a single top pharmaceutical exec has been indicted for any crimes -- even though, clearly, major crimes have occurred. Still, it seems the crackdown is having some effects.