A Hidden Cost Of Regulation

As I comment on from time to time [1], I work as a data scientist for an insurance broker that hardly anyone has ever heard of.  In recent months I have been made responsible for processing commissions not only for the insurance company I work for, but also for another sister company that is part of our larger corporate family that specializes in medicare sales.  Yesterday evening at 5PM I received an unwelcome and somewhat surprising e-mail that told me I had a week to finish two online courses offered by our federal government.  One of the courses was on general compliance in Medicare Parts C and D, and the other was on fraud, waste, and abuse.  It should go without saying that I was able to finish both of these courses in a reasonably speedy way–all told it took me under an hour to finish them both–and I sent my certificates as requested to the compliance officer for the sister company, who sent me a thank you message for my prompt completion of these puzzling responsibilities.

I would like to use this experience, which is likely a fairly common one for office workers in regulated industries like health, as an entrance into the hidden cost of regulation.  As I mentioned, the course took me roughly an hour to accomplish.  One of the courses was estimated to take thirty minutes, the other twenty minutes, and the entire process, including saving and sending my certificates, was pretty close for me to the estimates given.  Could that hour of time had been better and more productively spent?  Without a doubt.  There are many things I would have rather done with that time, and certainly many activities my employer would have preferred me to do, preferences which are not necessarily identical, which which agree in being different.  The compliance officer had to send e-mail messages to a few of my coworkers and myself–missing one of the people who had responsibilities for the same sister company–and presumably has to spend some time organizing the certificates and engaging in a process to inform the government that we are all following the regulations and that everything is alright here, nothing to see.  Then we must take into account that someone had to take time creating a largely useless course and creating a test for it with an answer key and programming websites to find this and other courses as well as programming certificates to prove compliance with said regulations.  All of this time is essentially waste.

It is rather ironic in this light that one of the courses was on reducing fraud, waste, and abuse in Medicare programs.  It is rather understandable that agents of any bureaucracy will not consider themselves as wasteful, but a lack of self-awareness does not make something any less true.  Waste, as the government defines it, is anything that costs the government more than necessary through error or negligence.  A less charitable person would consider it fraudulent on the part of government to deliberately require excessive and useless regulation that costs employers productive time, but even if there is no intent to do so, it is still wasteful.  Why?  Is a desk employee who has no role when it comes to deciding fees and compensation and who merely works with the transfer of data, usually on a massive and aggregate level and only rarely and reluctantly on the level of individual customers and policies the sort of person who is going to be particularly useful in reducing fraud, waste, and abuse?  To ask the question is to answer it.  To be sure, I have a fairly strong personal interest in reducing such things, being a person who appreciates efficiency, but I have very little interaction with the processes of sales and marketing on the one hand or providing care or claims administration on the other where these activities occur.  I am a humble cog in the wheel writing reports that hardly anyone ever reads and working to make sure that agents get paid for what they have already sold based on information from the carriers, and not a particularly glamorous cog at that.

Let us be fair, though, and comment that it is not only in government regulations that a great deal of waste is done.  Companies can engage in waste at least as easily as governments can, despite their supposed profit motive encouraging them to greater efficiency.  A great deal of my time is spent combining information together from disparate carriers using disparate formats so that information can then be fed into databases to allow for people to be paid promptly.  Yet some carriers provide the information only in .pdf format, forcing awkward conversions, while others fail to provide enough information to tie a policy back to the person who sold it and who needs to get paid for it, forcing the adoption of various lookups to connect the two.  There is great waste and inefficiency that often requires a great deal of effort for people to serve as intermediaries in this world, and yet in that status as an intermediary doing the work of translation and transcription and conversion one can find a profitable and enduring niche as a middleman.  Is it not uncharitable to curse the waste that gives us an honored place that we would not have standards were easier to make and enforce and communication easier to undertake?

[1] See, for example:








About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
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2 Responses to A Hidden Cost Of Regulation

  1. Pingback: Book Review: Why We Make Mistakes | Edge Induced Cohesion

  2. Pingback: And Hide Like Vampires From The Daylight | Edge Induced Cohesion

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