Technology alone won’t solve our political disagreements

June 5, 2012

In a recent op-ed, Reuters’ Chrystia Freeland suggests that if nations have any hope of restoring trust in their core institutions, they should focus on adopting technology to the extent that Silicon Valley has:

After all, whatever your political allegiances, it is hard to disagree that in recent decades, when it comes to transforming the world, [Silicon] Valley has outdone the Beltway.

One reason for that gap may be that while our private and business lives have been transformed by the technology revolution, government largely has not…

Unquestionably, technology can be useful in enabling governments to provide services more efficiently. For instance, Google has pioneered a “Government Transformers” program to demonstrate how public-sector employees can use Google Apps to improve the delivery of services. Google has showcased workers who have developed an online scheduling and payment system for volunteer firemen, made group purchasing by municipalities across Virginia more cost-effective, and increased citizen feedback on the budget of Georgia’s Fulton County by a factor of 100.

That said, the biggest strains on the federal budget are entitlement programs like Medicare, Medicaid and Social Security, and it’s not clear that technology is powerful enough to solve the budget problems that these programs pose. Any discussion of reforming these programs boils down to fundamental moral and political questions: How much taxpayer money should be spent on the elderly or the poor? How much revenue should be collected from the well-off?

Government expenditures on Medicare, Medicaid and Social Security total about $2 trillion per year, and so far detecting fraud has been the big area where adopting the latest technology has had an effect. From the Los Angeles Times (emphasis mine):

Last year the federal government charged 1,430 people with healthcare fraud, up from 797 in 2008, according to the Health and Human Services Department. The agency also reported revoking the eligibility of more than 60,000 Medicare and Medicaid providers and suppliers and recovering $4.1 billion in fraudulent claims.

Although there is broad agreement that fraud is widespread in Medicare and Medicaid, estimates of the scope of the program vary from $20 billion a year to $100 billion. Total spending on Medicare and Medicaid is expected to reach about $1 trillion this year.

Louis Saccoccio, chief executive of the National Health Care Anti-Fraud Assn., said the latest round of arrests was encouraging and reflected the intensified efforts by the government to combat fraud, especially since 2009.

He said he was most pleased to see that the Health and Human Services Department had stopped payments to 52 providers by using new tools to analyze data and detect potentially fraudulent charges.

The system, which was set up by the healthcare law President Obama signed two years ago, relies on a computer program to identify patterns of potentially fraudulent charges by providers. “That really has the promise to be a game changer,” he said. “In the future, what you will see is the real impact is going to come from preventing fraud.

When public programs are a trillion dollars in size, even 2 percent savings can be substantial. However, it’s still only a nibble around the edges of these enormous programs. Technology can make government more efficient, but it’s the body politic that must determine the purpose and scope of these government programs.

One comment

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…entitlement programs like Medicare, Medicaid and Social Security… Excuse me, but I have been REQUIRED to pay into Medicare & SS through INVOLUNTARY deductions from my paycheck for the last 33 years! Now that I am within a decade or so of collecting benefits, I am VERY tired of hearing about how this program I contributed to my entire working life is suddenly “an entitlement”. Medicaid was, when I first started out, a program for those in deepest poverty and I fully supported that idea. I paid more for daycare while I was at work than I paid per month in rent! Now, I know of several young mothers who do not work and they and their children (one decided to have another child after verifying that she would be able to get this second pregnancy covered under Medicaid too) get what amounts to free healthcare (ie paid by me, the taxpayer who can’t afford good insurance for myself or any health insurance for my spouse)!

Maybe if we had a national health insurance plan for ALL citizens, like every other industrialized nation on the planet, we could save LOTS of money by not having administrative costs for Medicare, for Medicaid, for VA benefits, for separate government employees plans, etc. Just ONE body that administers basic health insurance claims for ALL citizens; then let the for-profit insurance companies sell plans with ‘extras’ to those who would like to upgrade their basic plan. This way, we could ALL pay into the basic plan, have the same basic coverage, all health providers would know exactly what was and was not covered – anything beyond the basics would be billed to the patient. Then those who chose to buy other coverage would file with their providers. Simple, more cost effective, 100% of all citizens covered. End of arguments.

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