Institute of Criminal Justice Studies
£160bn lost globally to healthcare fraud
Thu, Jan 21, 2010
The report states that 56 billion Euros are lost to fraud and error in Europe alone.
One of the report authors is Dr Mark Button, director of the University of Portsmouth?s Centre for Counter Fraud Studies. He said an average of 5.59 per cent of global healthcare expenditure (£160bn) is lost each year.
Fraud is being committed at every level. Some of the examples uncovered in the report include:
- hospital managers falsely claiming to have done surgical procedures;
- doctors obtaining a grant to modernise their surgery spending the money on starting a car import/export business;
- dentists claiming for gold fillings that turn out to be mostly nickel;
- opticians claiming for sight test fees on patients who have died;
- pharmacists dividing up prescriptions into smaller packages to boost their fees;
- patients lying about their entitlement to treatment;
- drug companies artificially raising the price of key drugs or bribing doctors to prescribe their drug;
- equipment supply companies installing counterfeit diagnostic equipment.
Dr Button said: "This report provides invaluable information to those planning healthcare expenditure. It shows that fraud is not just a moral or ethical issue but a financial one too - with a serious negative impact on the quality of patient care. With an average of more than five per cent lost, it is clear that healthcare organisations need to make a much larger investment in counter fraud work.
?If they do so there are examples of the financial benefits which can be delivered - extra money for better patient care - within a relatively short timescale. The dilemma for policy makers is whether they can overcome their embarrassment and admit that serious losses to fraud (and error) are taking place because this is the first step to reducing them."
The report reviewed 69 exercises to accurately measure healthcare fraud and error losses, undertaken in 33 organisations from six countries covering healthcare expenditure totalling over £300 billion. It excluded guesstimates, figures derived from detected fraud losses, and figures resulting from surveys of opinion; it only included exercises which were based on a statistically valid sample of expenditure, which had measurable levels of accuracy, and which had been externally validated.
The report was published jointly by MacIntyre Hudson LLP, the Centre for Counter Fraud Services at University of Portsmouth, and the European Healthcare Fraud and Corruption Network.
Jim Gee, Director of Counter Fraud Services for MacIntyre Hudson, said: "This report proves that it is possible to measure the nature and extent of the losses to fraud and error. It may be embarrassing for some organisations to find out just how much they are losing but it is possible to do this.
?Because of the direct, negative impact on human life of losses to fraud, it is never easy to admit they take place. However, the first step to reducing losses is to stop being in denial about them.
?Where losses have been measured, and the organisations concerned have accurate information about their nature and extent, it has been shown that they can be reduced by up to 40 per cent within a year. This extra money could be spent on better patient care and the potential benefits to the quality of human life are enormous."