Centralized power has a problem: the individual. Every person is a potential disrupter of The Plan, and disruption must be forbidden. Otherwise, why have a central plan? This applies regardless of whether the planning is economy-wide or for particular sectors, such as medical services. (See F. A. Hayek’s The Road to Serfdom.)
The Answer to Government Fraud
Occam's Razor provides the easiest answer to the "day care" fraud splashed across the media: NO government subsidy whatsoever. Then when you discover fraud in other government programs you do the same, eventually the fraud is reduced. Simple, elegant and logical
