The Agricultural Revolution is History's Biggest Fraud - Yuval Noah Harari - Joe Abittan Sapiens Book

History’s Biggest Fraud

When you think of the biggest fraud in human history, you probably don’t think of the Agricultural Revolution, but Yuval Noah Harari does. In his book Sapiens, Harari writes, “the Agricultural Revolution certainly enlarged the sum total of food at the disposal of humankind, but the extra food did not translate into a better diet or more leisure. Rather it translated into population explosions and pampered elites. The average farmer worked harder than the average forager, and got a worse diet in return. The Agricultural Revolution was history’s biggest fraud.”
The general picture of the Agricultural Revolution was humanity mastering crops and moving from the dangerous lifestyle and near starvation of foraging to bountiful harvests. The reality is that the agricultural revolution was a great disappointment in comparison. The first crops that humans domesticated were barely more productive than wild plants. Controlling land and planting crops was only slightly more effective and efficient than harvesting a lucky cache of wild edible plants. The work was hard and tedious, and a full day focused on a single crop meant that farmers were not out finding edible fruits, nuts, fungi, and animal meat to provide a well rounded and nourishing diet. Farmers ate what they grew, almost exclusively, and nutritional deficiencies were common.
Harari finds it amazing that early humans were able to persevere through the early days of farming given the terrible tradeoff involved. Farming was not a clear bounty for humanity and was not an obvious plus for the species. It was not until substantial investments over time and smarter approaches to farming had been developed and implemented that the Agricultural Revolution began to pay off. Initially, it was a fraud, promising security and full bellies but instead delivering poor quality crops that didn’t meet a human’s nutritional needs while demanding incredible efforts.
Pay and Chase

Pay and Chase

If you were working to set up a healthcare plan for your employers, you would want to make sure that payments by the insurance plan were quick so that your employees were not constantly bombarded by letters and phone calls from doctors offices asking when they would be paid by the insurance plan. You also would want the plan to have a system in place for catching fraudulent claims or errors in charges from hospitals and doctors offices. Both of these desires are reasonable, but in the real world, they have created a system of perverse incentives that Dave Chase calls “Pay and Chase” in his book The Opioid Crisis Wake-Up Call. Here is how Chase describes it in his book:

 

“Another fee opportunity is so-called pay and chase programs, in which the insurance carrier doing your claims administration gets paid 30-40 percent for recovering fraudulent or duplicative claims. Thus, there is a perverse incentive to tacitly allow fraudulent and duplicative claims to be paid, get paid as the plan administrator, then get paid a second time for recovering the originally paid claim.”

 

Insurance companies administering health insurance don’t actually have an incentive to create tools to proactively stop fraud. They actually benefit when there is fraud, because they get a bonus when they spot the fraud and recoup the already paid fraudulent amount. As an employer partnered with the insurance company, you might be happy that claims are paid quickly so that your employees don’t have negative interactions with doctors about payment, but the way that many plans currently operate, you will end up paying a lot more overall when your plan pays for fraudulent claims and billing errors. You will pay for the fraud itself, and if you get any money back, it won’t be for the full amount that your claim administrator originally paid in the fraud or error – they will keep a cut.

 

Chase continues, “Many of the fraud prevention tools used by claims administrators are laughably outdated and weak compared to what they are up against. Modern payment integrity solutions can stop fraud and duplicate claims, but aren’t being used by most self-insured companies’ claims administrators.”

 

Poor incentives and confusing systems have allowed this to occur. This is one example of how the systems around healthcare in the United States are not aligned with what we would all agree should be the number one focus: improving the health of Americans. Employers don’t want their employees to be angry, and plan administrators want to maximize profits. In the end, we all pay more as fraudsters find ways to get past the outdated fraud prevention systems of insurance companies and as those companies turn around and charge fees for catching the fraud and payment errors they didn’t prevent in the first place.