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Column: Arms inspection stalling, runaway healthcare costs, and why Snowden revealed himself

By Steven Brill

1. Reality check on arms inspection stalling:

This New York Times article published last Sunday provides good detail on the challenges associated with implementing an arms inspection deal with Syria. However, someone this week ought to do a comprehensive recap of the years of stalling done by North Korea, Iraq and Iran to stave off and otherwise jerk around U.N. arms inspectors. President Obama may have found a convenient excuse for calling off the attack on Syria, but despite the promises of the rogue countries when they agreed to inspections, has any such mission ever gone according to schedule? And this one is supposed to proceed apace in the middle of a civil war.

2. Runaway healthcare costs, 50 cents at a time:

The test strips that diabetics use to measure blood sugar levels can be bought for about 50 cents each in boxes of 50 at the local Walgreens. That doesn't seem like much, but it can add up when the world's biggest healthcare customer is doing the buying.

Medicare spends over a billion dollars a year to provide the test strips to about 4.6 million beneficiaries, according to a recently released report from the Department of Health and Human Services Office of Inspector General.

Buried in the report are juicy leads for two important stories — one about fraud and the other about lobbying that allows both the fraud and higher costs even when there is no fraud.

First some facts:

The report found what it called "questionable billing" amounting to $425 million of the $1.1 billion Medicare paid for the test strips in 2011, the year that was audited. That's nearly 40 percent suspected overbilling. Of the $425 million, $329 million was generated by bills from suppliers in just ten of the 955 geographic areas into which Medicare divides the country. Tops on the list were two Florida areas: Port St. Lucie, with $114 million in questionable billing, and Miami/Ft. Lauderdale/Pompano Beach with $113 million. (To put those numbers in context, that $114 million in potential overbilling for Medicare-funded test strips is more than 25 percent of the city of Port St. Lucie's entire budget for that year.) The report noted that Medicare initiated a competitive bidding process in 2011 in a small number of regions covering about 3 percent of the country. In those regions, suppliers of what's called durable medical equipment were forced to compete on price (after passing certain quality tests). According to the Inspector General, the regions that launched competitive bidding saw an 87 percent drop in questionable test strip billing, while the rate of questionable billing everywhere else stayed about the same (it dropped 3 percent). The report also noted that with competitive bidding the cost of a box of 50 test strips dropped to $14.62, compared to the $32.47 that Medicare pays where there is no competitive bidding. (Amazon sells a box of 50 for $27.85 — meaning that without competitive bidding Medicare, the world's largest healthcare products customer, pays about 20 percent more than you or I would pay.) These price comparisons are consistent with another Inspector General's report that found that in those limited areas where competitive bidding was implemented for all durable medical equipment (including test strips) the prices paid dropped 42 percent. Because Medicare spends about $15 billion for these goods, that would mean that if competitive bidding was the practice all over the country, Medicare's cost for all of this equipment would drop $6 billion a year. Last fact: the geographic areas implementing competitive bidding were expanded last July — but neither Port St. Lucie nor Ft. Lauderdale/Miami/Pompano Beach were included, and those champions of questionable billing showed an increase in dubious test strip bills in 2011. However, in July Medicare initiated competitive bidding for mail-order suppliers of test strips across the country. That has dropped the average price to $10.41. All of which is a road map for two promising stories.

First, what's going on with those suppliers in Florida? How did they become the champs of questionable billing? Does the problem extend beyond test strips to more expensive equipment like canes, wheelchairs, or oxygen tanks? What's being done about it?

Second, let's have an inside look at the fierce lobbying done by the medical suppliers that has convinced Congress to tie Medicare's hands by not allowing this 800-pound gorilla of medical equipment buyers to bargain the way any other purchaser can, except in some minor (albeit slowly expanding) areas of the country? And why wouldn't the two Florida regions that would seem, from the test strip audit at least, to stand to benefit the most from competitive bidding not be included in the second phase of the rollout?

More generally, how did the logjam get broken with mail order test strips — and what's holding it back for everything else Medicare buys, at a time when controlling spiraling healthcare costs is supposedly at the top of every policy-maker's agenda? That's a $6 billion a year question.

3. Behind Snowden's decision to reveal himself:

The scoops from what seem to be a limitless trove of secrets that Edward Snowden downloaded and made off with continue to explode across front pages and home pages that now include the New York Times and ProPublica, as well as the Guardian and Washington Post. This demands that someone take a new look at the circumstances surrounding Snowden's decision to reveal himself as the source back in May, when he let the Guardian's Glenn Greenwald and Laura Poitras tape an interview with him.

That decision was a critical turning point that affected everything that has happened since.

Had Snowden not decided to out himself, the NSA, which apparently still doesn't know exactly what he downloaded, might not have figured out who he was. And as the stories based on the leaks continued, the agency might have then been panicked into fearing that there must be multiple sources providing leaks to multiple news outlets. Imagine the dragnet that would have ensued — and dominated the headlines much the way the debate over whether Snowden is a hero or traitor became the core narrative.

Had Snowden stayed underground, Greenwald and Poitras might be in court, or jail, facing contempt charges for refusing to reveal their sources. Reporters for the Times and ProPublica would now probably be being dragged in right behind them.

If the leaker was in hiding, the NSA might have denied the authenticity of the materials Snowden exposed, or at least refused to comment on them.

And if Snowden had somehow remained hidden he might not have had to flee, thereby keeping his secrets out of the hands of the Chinese and Russians, who almost certainly downloaded them while he was their guest.

In this column in June, I pointed out that Greenwald and Poitras — whose avoidance of these legal hassles makes them the prime beneficiaries of Snowden's confession — had a strong interest in Snowden revealing himself. What's happened since only makes the circumstances surrounding Snowden's self-outing more intriguing and important.

Snowden's decision is unprecedented. Pentagon Papers leaker Daniel Ellsberg, to whom Snowden has frequently been compared, may have admitted and aggressively defended what he did, but that was only after he was outed by another reporter; he did not step forward on his own.

Did Greenwald and Poitras encourage Snowden to come clean? Did they make that a condition of their commitment to publish his material? Did they paint him a vision of what his place in history might be if he stepped out of the shadows to claim his whistle-blower role?

Will reporters who are leaked explosive materials like this look at this precedent and encourage their sources to do the same? Should they?

Or did Snowden assume that the NSA would be able to figure out who he was, meaning that he had to flee and by doing so might get whistle-blower protection wherever he fled by standing up and justifying what he had done?

While we're on the subject of Snowden, I'm still waiting for the story I also suggested in June about what the government is doing to get back some of the $1.3 billion it paid Snowden's employer, Booz Allen Hamilton, last year as compensation for all the damage he has caused.

(Steven Brill is a Reuters columnist. Opinions are his own.)

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