Statecraft How to Bring Down Healthcare Costs
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Oct 2, 2025 Anup Malani, a Professor of Law at the University of Chicago and the first Chief Economist at the Centers for Medicare & Medicaid Services, dives into the complexities of American healthcare. He discusses why the U.S. spends so much yet struggles with life expectancy, exploring issues like Medicare fraud and the incentives driving up costs. Anup also highlights ways to curb expenses using site-neutral payments, the impact of demographics on spending, and innovative approaches to drug pricing and health data interoperability.
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A Simple Definition Of Fraud
- Define fraud as mismatches among what should be done, what was done, and what was billed.
- Use that triad to classify upcoding, unnecessary care, and substandard care for targeted enforcement.
High Thresholds Protect Patients During Enforcement
- Use high thresholds and graduated scrutiny to avoid denying necessary patient care while catching egregious fraud.
- Target resources to the most suspicious outliers rather than broadly restricting access.
Risk Adjustment Is A Moving Game
- Risk adjustment aims to stop cream skimming but can be gamed if insurers manipulate inputs like diagnostic claims.
- CMS must either remove manipulable inputs or raise manipulation costs and continually update models.