The Financial Cost of Healthcare Fraud

The measurement of losses to fraud is an essential first step to successful action. Once the extent of fraud losses is known then they can be treated like any other business cost - something to be reduced in the best interest of the financial health and stability of the healthcare organization concerned. It becomes possible to go beyond reacting to unforeseen individual instances if fraud and to include plans to pre-empt and minimize fraud losses in business plans.

The financial and economic damage resulting from healthcare fraud is surely the worst aspect of the problem. Yes , fraud is unethical, immoral and unlawful; yes the individuals who have proven to have been involved should be punished; yes the sums lost need to be traced and recovered. However, these are actions which take place after the fraud losses have happened – after the resources have been diverted from where they were intended and after the damage to the quality of patient care has occurred.

In the current macro-economic climate, reducing these losses is one of the least painful ways of reducing costs. This presentation identifies what the financial cost of healthcare fraud and error has been found to be and thus the “size of the prize” to be achieved from reducing them.