The era of the municipal bankruptcy is now upon us, but we may soon be entering the age of entitlement bankruptcies. An excellent piece in the Wall Street Journal spotlights major financial and administrative problems in Social Security’s disability program:
But many of the doctors haven’t practiced outside their specialty in decades, if at all, making the complexities of disability cases even harder to analyze, several doctors said. […]The Social Security Disability Insurance program paid $124 billion in benefits in 2010, up from $55 billion in 2001. The backlog of pending appeals in September was 771,318, up from 705,367 in 2010 and 392,397 in 2001.The disability application process has many layers, including hundreds of state-based field offices that accept applications and administrative law judges who weigh appeals.
As the piece makes abundantly clear, the problems in the program are manifold. Most disturbing however, are two key statistics: one percent of the American population applies for disability protections each year, and financial difficulties may bankrupt the program in under a decade.Plainly, this is unsustainable, yet many of the more obvious solutions threaten to worsen the program’s other serious problem — poor and ineffective management. When streamlining a large and expensive bureaucracy, cutting back on employees and payroll are a common starting place. Yet the Social Security Administration’s attempts to do more with less seem to be backfiring, leading to underqualified doctors passing judgement on applications outside their area of expertise:
In targeting the doctors, the Social Security Administration says it is seeking to overhaul a part of the disability-review process that can be both expensive and slow.But many doctors and former agency officials say the changes threaten the quality of decisions. Several doctors said medical opinions were now prone to inaccuracy since many specialists don’t have the backgrounds to make decisions outside their areas of expertise. The new policy could make doctors more likely to award benefits to those who don’t qualify and deny benefits to those who are entitled, these doctors said. […]But many of the doctors haven’t practiced outside their specialty in decades, if at all, making the complexities of disability cases even harder to analyze, several doctors said.
This is problematic enough, but political pressure on review board doctors makes things worse. Any government program is bound to have its share of political interference, but the disability program is unusually vulnerable. The review procedures are somewhat arbitrary and easily abused, and the article has multiple stories of doctors who were fired for refusing to make the “correct” decision on a disability case. Years of catastrophic mismanagement have brought the program to the brink of failure, and it is unclear how it can be fixed without major changes.These problems are especially troubling because the disability program is a vital and important part of our social safety net. As we must, we will be raising the age of retirement and of eligibility for Medicare; that will make the need to provide for those who are unable to work more acute and proportionately more workers will become disabled as the age of retirement rises.A system that is efficient to operate, sustainably financed, and gets help to those who need it while rejecting those who aren’t legitimately entitled is difficult to build — but getting that right is one of the things America must do as we gear up for the challenges ahead.Whether you like big government or hate it, American government today costs too much and gets too little done. At Via Meadia we want to hear more from politicians about how to make government work.