'Financial Cost of Healthcare Fraud' Report
The world's first ever data on the real cost of fraud (and error) in healthcare organisations
Contact: Anne Pierson, EHFCN, +322 739 7982
anne.pierson@ehfcn.org
Brussels, 18 January 2010
FIRST REPORT SHOWS THE GLOBAL COST OF HEALTHCARE FRAUD - €180 BILLION LOST
‘The Financial Cost of Healthcare Fraud' Report – published today – provides the world's first ever data on the real cost of fraud (and error) in healthcare organisations. It finds that an average of 5.59% of global healthcare expenditure – or €180 billion - is lost each year.
This would be enough to
- provide clean, safe water around the globe
- bring malaria under control in Africa
- provide the Diptheria, Tetanus and Pertussis vaccine to all 23.5 million children under one years old who are currently not immunized (2.5 million die each year from diseases preventable by vaccines)
AND
- quadruple the budget of the World Health Organisation and UNICEF (the United Nations Childrens Fund
with more than €110 billion left over – enough to build more than 1,000 new hospitals at developed world prices.
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. It reviewed 69 exercises to accurately measure healthcare fraud and error losses, undertaken in 33 organisations from 6 countries. 66 of those exercises were successfully completed covering many different types of healthcare expenditure totalling over €330 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 were externally validated.
Jim Gee, Director of Counter Fraud Services for MacIntyre Hudson, and Chair of the Centre for Counter Fraud Studies, 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. If an organisation is not aware of the extent or nature of its problem, then how can it apply the right solution?
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% 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.”
Paul Vincke, President of the European Healthcare Fraud and Corruption Network, said,
“The Report shows that 56 billion Euros are lost to fraud (and error) in Europe alone. We have a fraudulent minority who are prepared to divert the funds which are intended to keep us all well. Let's not pretend. That minority exists in all our countries. No country is immune. None of us can afford to pretend that we have no healthcare fraud.
Every cent lost drains the lifeblood from our healthcare systems and undermines their capacity to provide essential treatment. We need to join together and mobilise the honest majority, we need to do this across Europe and we need to do it urgently.”
The Report shows that all the exercises revealed percentage losses of more than 3% of the expenditure, with over a fifth recording losses of greater than 8%.
Mark Button, Director of the Centre for Counter Fraud Studies, 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 5% 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 Financial Cost of Healthcare Fraud' - Report is available at our website. For our publications please visit:
http://www.ehfcn.org/resources/publications/ehfcn-publications.
Note to editors
The European Healthcare Fraud and Corruption Network (EHFCN) – Established in 2005, EHFCN is the only European organisation dedicated to combating healthcare fraud and corruption across Europe in order to bring back money to healthcare services for the benefit of every patient. EHFCN provides information, tools, training and assistance in fighting fraud and corruption to its member associations. It also offers a platform for members to exchange information and ideas. Further information can be found at www.ehfcn.org.