During his spell as a US special government employee earlier this year, billionaire Elon Musk said the following: “The waste and fraud in entitlement spending […] Most of the federal spending, is entitlements, so that’s the big one to eliminate.” In doing so, entitlement programs, such as Social Security and government-sponsored healthcare, became swept up in the latest chapter for a phrase hailed as common sense and derided as propaganda.

“Fraud, waste and abuse” (FWA) has become a loaded term in US political discourse, invoked to justify sweeping changes in government programs. At first glance, targeting FWA seems like a reasonable goal: who would oppose eliminating inefficiency, unlawful behavior, or unethical misuse of public funds? Invoking FWA suggests that massive savings can be realized simply by ending inefficiencies and rooting out bad actors; the rhetoric around the phrase suggests these savings can result without cutting services or harming beneficiaries.

Most US government programs deliver something that is already scarce, something from which funding cannot be slashed without making difficult choices. But instead of debating the actual merits or consequences of policy proposals and choices, lawmakers use the narrative of FWA to claim they are concentrating on cleaning up dysfunction. This rhetorical convenience, however, obscures reality. It not only overstates the scale of actual fraud or inefficiency, often without evidence, but enables damaging policy shifts that undermine public trust and justify cuts to essential services that many people depend on.

Over recent decades, this reality has been evident in policy enactments that promise to drastically reduce spending on Medicare, a government-sponsored program that funds healthcare for the country’s elderly, and Medicaid, which funds care for some people with disabilities, some low-income families, and some people in other populations. Examples include the Deficit Reduction Act of 2005 enacted by then president George W. Bush, the Small Business Jobs Act of 2010 enacted by then president Barack Obama, and the One Big Beautiful Bill Act enacted by President Donald Trump in 2025.

Proponents often justify reductions with familiar FWA language, arguing that they are trimming excess and protecting taxpayer dollars. But counterarguments suggest that most of the policy changes have little evidential connection to FWA as defined by the US Centers for Medicare and Medicaid Services. For instance, in a recent policy enactment, changes that affect subsidies to low-income Medicare beneficiaries and add bureaucratic hurdles for Medicaid beneficiaries are said to hold the potential to tangibly harm vulnerable populations. Leaders from rural healthcare institutions warned that the cuts could destabilize entire healthcare ecosystems in underserved regions, potentially forcing facilities to close and leaving communities without essential care.

Hidden consequences of FWA policy impacts: a case study

Recent research we conducted highlights how narratives around reducing healthcare costs through regulatory innovations are framed as preventing FWA, rather than having the effect of reducing quality or equity of care. Such framing largely ignores the ways in which such innovations may amplify the risks to beneficiaries of government-sponsored healthcare programs. These potentially adverse outcomes get camouflaged by congratulatory efforts to reduce illegitimate spending.

At the center of our research is a critical case study: a rural healthcare provider caught in a sweeping regulatory innovation. Many services rural healthcare providers offer are not lucrative, but necessary. These include nursing care, assisted living, portable medical equipment and transport, and hospice care, as well as primary care. Local residents travel great distances for more specialized services.

The regulatory innovation we studied, an algorithm designed to identify healthcare providers whose claims deviate from statistical norms, flagged higher-than-average lengths of patient stays and costs per beneficiary at the provider organization. The results were suspended payments, revoked Medicare privileges, and the near collapse of the provider; however, a lengthy legal process ultimately conceded that the numbers reflected the reality of caring for a medically underserved, high-needs population, not fraud.

The algorithm we examined does not detect fraud per se but identifies “abnormal” patterns that reinforce a reductive view of FWA rooted in statistical regularity, not patient needs and clinical judgment. As highlighted by our research, regulatory “innovations” such as this one create a regime where cost becomes the sole yardstick for legitimacy, with care that is discretionary, individualized or outside standard parameters – and often essential for patients – painted as suspicious or illegitimate. As such, this case reveals a fundamental misalignment. Regulators promote public narratives of fraud prevention and efficiency gains. But on the ground, quality and accessibility of care, core pillars of government-sponsored healthcare programs, are impaired.

Reframing accountability and moving beyond FWA narratives

Our work exposes how rhetoric associated with regulatory innovations can recast healthcare denial as a virtue. By framing cost-cutting as fraud prevention, government agencies deflect accountability for service reductions, masking their impact on vulnerable and marginalized populations and avoiding the political implications of austerity by claiming the moral high ground of rooting out FWA. Proposals to cut government funding to constrain costs are met with emotion and resistance on both sides of the debate. However, such proposals appear to be met with less emotion when they are pitched as FWA initiatives.

Our study warns against uncritical adoption of regulatory changes that prioritize FWA claims at the expense of patient access to healthcare. Such claims can erode public trust in government-sponsored programs, while creating confusion about and misdirecting scrutiny from where FWA actually is. They reinforce a cynical view of public services as bloated and corrupt, despite most healthcare providers acting in good faith.

This is not to say that the US healthcare system does not have its issues; however, true fraud represents a fraction of total spending. The clear purpose of misleading narratives around FWA is to hide the gravity of what is being taken from the American people by pretending that what is being taken has no value. These narratives dismiss services that benefit those in need as not only inconsequential, but even as detrimental to the fabric of society. This use of FWA helps prevent substantive debate about how to improve government-sponsored healthcare programs, and risks entrenching political expediency to the detriment of citizens’ well-being.

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This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Lisa Baudot, HEC Paris Business School; Jared Koreff, Trinity University; Kazeem Akinyele, University of Wisconsin-Oshkosh, and Steve G Sutton, Norwegian School of Economics

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Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.