Complex Systems with Patrick McKenzie (patio11)

Picking Uncle Sam's pocket, with Jetson Leder-Luis

Oct 24, 2024

01:18:10

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Jetson Leder-Luis, an economist and fraud expert at Boston University, dives into the complexities of government program fraud. He exposes shocking healthcare fraud tactics, from hospice manipulations to ambulance service schemes. The conversation reveals how systemic flaws and poor policy designs enable these abuses. They discuss the economic fallout of fraudulent claims, the ROI on anti-fraud measures, and the ethics of vaccine distribution during COVID-19. Jetson advocates for innovative solutions to enhance regulatory frameworks and deter fraud.

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Quick takeaways

The podcast emphasizes that systemic issues and inherent incentives within government health programs significantly contribute to widespread fraud, particularly in Medicare.

Discussion highlights the complex relationship between healthcare fraud definitions and practices, underscoring challenges in enforcement and resource allocation by government agencies.

Jetson stresses the importance of robust investment in anti-fraud measures, noting that underfunding undermines effective detection despite evidence of high returns on prevention efforts.

Deep dives

Introduction to Fraud Research

The discussion centers around the study of fraud, particularly against government programs, with a focus on health care fraud in the United States. The guest, Jetson Leder-Luis, an assistant professor at Boston University's Questrom School of Business, specializes in this area, especially Medicaid and Medicare fraud. He highlights that the government spends trillions annually on services to citizens and that, unfortunately, there are substantial incentives for individuals to commit fraud within these systems. Jetson's background and research experience offer valuable insights into the complexities of identifying and addressing fraud in health care.

Intro

1min

Fraud in Government Healthcare Programs

20min

Examining Organized Crime and Financial Fraud Mechanisms

4min

Navigating Tax Challenges in Healthcare Fraud

6min

Navigating Fraud in a Political Landscape

8min

Vaccine Distribution & Economic Challenges During COVID-19

20min

Investing in Anti-Fraud Measures

14min

Innovative Approaches to Fraud Prevention and Policy Efficiency

5min

In this episode, Patrick McKenzie (patio11) is joined by economist and fraud researcher Professor Jetson Luis-Leder to examine the systemic issues underlying government program fraud. Jetson and Patrick discuss healthcare fraud cases, including hospice eligibility manipulation and ambulance transport schemes, and other fraud practices against unemployment and the PPP program. The discussion reveals how institutional constraints, technological limitations, and policy design choices create opportunities for both beneficial and harmful rule violations. They also analyze the ROI of fraud prevention measures, the effectiveness of whistleblower incentives, and how bureaucratic systems can be redesigned to prevent abuse.

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Full transcript available here: https://www.complexsystemspodcast.com/defrauding-government-jetson-leder-luis

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Links:

Jetson's website: https://sites.bu.edu/jetson/
Paper: Ambulance Taxis by Jetson Leder-Luis Ambulance Taxis: The Impact of Regulation and Litigation on Health Care Fraud
Paper: Did FinTech Lenders Facilitate PPP Fraud by John M Griffin, Samuel Kruger, Prateek Mahajan https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3906395
Paper: Is Fraud Contagious by John M Griffin https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4599654
Paper: Unemployment Insurance Fraud in the Debit Card Market by Jetson Leder-Luis with Umang Khetan, Yunrong Zhou and Jialan Wang https://www.nber.org/papers/w32527
Book: Recoding America by Jennifer Pahlka https://www.amazon.com/Recoding-America-Government-Failing-Digital-ebook/dp/B0B8644ZGY
Podcast: Jennifer Pahlka on Ezra Klein
https://open.spotify.com/episode/2VPErCIG1pbcnYFBojrKcG
Podcast: Dave Guarino on Odd Lots https://open.spotify.com/episode/43HI3NuxZGsl13U365xZxa
Bits About Money https://www.bitsaboutmoney.com/
Related Complex Systems episodes: Dan Davies and Dave Guarino's episodes

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Twitter:
@patio11

@jetson_econ

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Timestamps:

(00:00) Intro

(02:04) Overview of Medicare/Medicaid

(02:41) Estimated $50-100B fraud losses

(03:31) Taxonomy of healthcare fraud

(08:04) Hospice fraud; potentially saved money

(16:33) A $10 billion asterisk: ambulances for dialysis patients

(21:30) Sponsors: Work OS | Check

(24:45) Complexities of fraud detection and prevention

(39:02) Pandemic fraud

(41:34) Findings on PPP loans fraud

(48:19) Supply chain of fraud

(52:06) Policy and enforcement challenges

(01:08:32) Whistleblower programs

(01:14:54) Final thoughts

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Complex Systems is part of the Turpentine podcast network. Turpentine also has a social network for top founders and execs: https://www.turpentinenetwork.com/

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