Example OF The Impact OF Health Care Fraud On Health Care Essay

Type of paper: Essay

Topic: Health, Bad Faith, Fraud, White Collar Crime, Health Care, Business, Government, United States

Pages: 3

Words: 825

Published: 2020/09/20

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According to Sparrow (1998), it is recorded that more than one trillion dollars are spent and allocated on health care services each year in the United States. This figure is approximately fifteen percent of the gross national product of the country. The part of the yearly health care expenses wasted because of fraud and abuse stays not known because these issues are not measured systematically. However, traditional knowledge, as supported by the recent medical and Medicare studies, acted upon by the Office of Inspector General of the United States Department of Health and Human Services. These studies estimate losses credited to fraud and abuse that may surpass ten percent of the yearly health care expenditure or $100 billion every year.
In the year 1992, a movement, to begin health care reforms, has been a matter of a nationwide discussion, and the matter of fraud control has received considerable attention. As an example, health care fraud remains a major priority of the United States Department of Justice. In 1997, criminal convictions increased threefold again and again during the past years (Sparrow, 1998). Due to these findings, the Federal Bureau of Investigation (FBI) has significantly increased the number of agents and individuals that are taking care of its health care fraud division.
This exceptional attention to the subject matter of fraud in the health care of people created a number of evident successes. Organized plans and actions by the Government and State officials alongside private insurance institutions have succeeded in determining the health care fraud and abuse done through major corporations. However, small steps of improvement are the evident results of the courses of actions of the mentioned governing bodies.
Dietz, et. al. (2013) also supports the findings mentioned as above as they state that health care fraud remains a big problem within the United States. They note that the issue was named as the second biggest crime problem in the country that goes after violent crime. Despite the changes in the political and social scenes of America since the year 1993, health care fraud remains a priority because of the large financial problems that it has caused taxpayers. During the year 2010, citizens spent $2.6 trillion on health care. It was an approximation by the National Health Care Anti-Fraud Association that health care expenditures of between 3% and 10% are wasted on fraud. This finding has resulted to an estimated $78 to $260 billion taken from taxpayers on a yearly cycle (Dietz et. al., 2013).
It was found out that health care fraud consists mainly of a number of different schemes of methods (Dietz et. al., 2013). It was noted that in every case, the issue mainly concentrates on the money that it gains. During the past, health care fraud was singlehandedly done by medical practitioners and providers. Nevertheless, current movements are showing that frauds in the health care department are also done by individuals with criminal backgrounds who have some or no medical experience at all. There is also the fact that these perpetrators are also parts of large pharmaceutical institutions that are connected with malpractice. As an example, the company GlaxoSmithKline (GSK), confessed to off labeling the selling of medicines and holding back the safety precautions from the Food and Drug Administration. GSK finally settled the case with the United States Government endowing the federal institution with $3 billion. During the year 2013, Ranbaxy USA admitted to being guilty of introducing degraded drugs into the American market.
Other noted methods of health care fraud include but are not limited to replacing substandard products and billing for more expensive ones, charging for services not performed, and being connected with kickbacks. There are also instances of rendering unnecessary procedures to have higher reimbursements and giving narcotics for higher money rather than assessing its medical needs.
The influence of abuse, waste and fraud on customers, whether it be the government agencies or insurance companies, are at a higher level each time health care fraud happens. Losses on fraud weaken an individual payer’s financial capacity; that being fraud losses compete with the person’s total income (SAS Institute, 2010). These fraud losses enhance the rising health care expenses that weaken an institute’s ability to offer competitive rates to its customers, thus wearing down profits and increase the stress to notch down source payment rates. As a result, losses on fraud lead to higher rates for customers and lower payment rates for its providers. It was indicated in the 2011 report of the PKF (UK) LLP that worldwide research shows that health care fraud cases organizations a 7.29% in average of expenses. This figure differs mostly according to a company's ability to counter fraud.
Gaps in the healthcare date are more than just mere PR cases or IT concerns. This issue weakens or challenges a patient’s trust and it may harm an institute’s goodwill and also their objectives. A higher degree breach or an unswerving track record of breaches happening in the health care scene can damage a product (McNeal, 2014). If the fraud reaches a point where the patient becomes unsettled, then the doubt causes a great impact on an institute’s ability to offer competitive care packages. Although the government with technology can provide certain safety measures to secure a patient’s data, it will be the organization’s employees who will strengthen the security in their company’s culture. Providers must help patients understand that their data is not compromised when availing of the services. It must be a carrying principle of health care providers that they have a duty to their patients and that they have promised to keep an individual’s welfare over theirs. Without the control over the losses of fraud, individuals will continually lose the capacity to pay for medical care.


Dietz, J. (2013). Fighting health care fraud in bold and innovative ways. Military Medicine, 178(10), 1041-1043.
McNeal, M. (2014).Hacking healthcare. Marketing Health Services, 18-21.
PKF (UK) LLP. (2011). The financial cost of healthcare fraud what data from around the world. Retrieved from file:///C:/Users/Neo/Downloads/PKF%20Fraud_FINAL.PDF
SAS Institute. (2010). Combating health care fraud. Retrieved from SAS Institute website: http://www.sas.com/resources/whitepaper/wp_15046.pdf
Sparrow, Malcolm K. (1998). Fraud Control in the Health Care Industry: Assessing the State of the Art. Washington: U.S. Dept. of Justice, Office of Justice Programs, National Institute of Justice.

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