Saturday, October 16, 2010

Is 99.8 % data accuracy enough?

Ripped from recent headlines, we see how even a .2% failure can have a big impact.

WASHINGTON (AP) ― More than 89,000 stimulus payments of $250 each went to people who were either dead or in prison, a government investigator says in a new report.

Let’s take a good, hard look at this story. It begins with the US economy slumping.  The president proposes and passes through congress one of the biggest stimulus packages ever. The idea is sound to many; get America working by offering jobs in green energy, shovel-ready infrastructure projects. Among other actions, the plan is to give lower income people some government money so they can stimulate the economy.

I’m not really here to praise or zing the wisdom of this. I’m just here to give the facts. In hindsight, it appears as though it hasn’t stimulated the economy as many had hoped, but that’s beside the point.

Continuing on, the government issues 52 million people on social security a check for $250. It turns out of that number nearly 100,000 people were in prison or dead, roughly 0.2% of the checks. Some checks are returned, some are cashed. Ultimately, the government loses $22.3 million on the 0.2% error.

While $22.3 million is a HUGE number, 0.2% is a tiny number.  It strikes at the heart at why data quality is so important.  Social Security spokesman Mark Lassiter said, "…Each year we make payments to a small number of deceased recipients usually because we have not yet received reports of their deaths."

There is strong evidence that the SSA is hooked up to the right commercial data feeds and have the processes in place to use them. It seems as though the social security administration is quite proactive in their search for the dead and imprisoned, but people die and go to prison all the time. They also move, get married and become independent of their parents.

If we try to imagine what it would take to achieve closer to 100% accuracy, it would take up-to-the-minute reference data. It seems that the only real solution is to put forth legislation that requires the reporting to the federal government any of these life changing events. Should we mandate the bereaved or perhaps funeral directors to report the death immediately in a central database? Even with such a law, there still would be a small percentage of checks that would be issued while the recipient was alive and delivered after the recipient is dead. We’d have better accuracy for this issue, but not 100%

While this story takes a poke at the SSA for sending checks to dead people, I have to applaud their achievement of 99.8% accuracy. It could be a lot worse America.  A lot worse.

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Disclaimer: The opinions expressed here are my own and don't necessarily reflect the opinion of my employer. The material written here is copyright (c) 2010 by Steve Sarsfield. To request permission to reuse, please e-mail me.