The Economist published a story on Saturday on the cost of fraud in the US healthcare system. As they noted:
In America the scale of medical embezzlement is extraordinary. According to Donald Berwick, the ex-boss of Medicare and Medicaid (the public health schemes for the old and poor), America lost between $82 billion and $272 billion in 2011 to medical fraud and abuse (see article). The higher figure is 10% of medical spending and a whopping 1.7% of GDP–as if robbers had made off with the entire output of Tennessee or nearly twice the budget of Britain's National Health Service (NHS).
I have to say that whoever wrote this article clearly did not know the cost of the NHS, which now amounts to £140 billion a year, but that aside this is a staggering story.
The first thing to always ask is whether it is credible. In my opinion, it is. A fraud rate of 10% already exists, in my opinion, within the entire private sector in the UK so I can see no reason why, if health care was privatised, that error rate could not occur within that system. And the fact US healthcare costs almost twice as much as UK healthcare as a proportion of GDP with, overall, little better outcome for the population as a whole, must in part be explained by this fraud rate ( and the enormous costs of administration and inefficiency that its market system creates).
The second thing to ask is whether or not this error rate could be replicated within the NHS. Again, the obvious answer appears to be that this is entirely foreseeable. We have, after all, already seen serious cases of fraudulent misrepresentation of activities undertaken and of misinvoicing by outsourcing companies within the UK, which would appear to be the basis for much of this US fraud.
In that case if you want to see the future of a substantially privatised NHS just look at what is happening in the USA and you will see exactly what we will get. It won't be better health care, but there will be massive fraud.
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This is being very picky, but I may want to dispute the comment “with, overall, little better outcome for the population as a whole”. The evidence seems to suggest the outcomes, for the US population overall are actually worse. I realise that some of the driver for the poor outcomes is the number of uninsured people (before the introduction of the Affordable Care Act), but the US system does seem to provide worse outcomes for greater cost. Muenning and Glied (2010) provides a good summary of outcomes and explanations. For example:
“In 1950, the United States was fifth among the leading industrialized nations with respect to female life expectancy at birth, surpassed only by Sweden, Norway, Australia, and the Netherlands. The last available measure of female life expectancy had the United States ranked at forty- sixth in the world.”
An over-emphasis on expensive specialist hospital care (sometimes delivering marginal health improvement), a fee for service based approach to intervention (promoting over investigation and over intervention), a lack of preventative up-stream care for chronic conditions, and large variations in care delivery, are all reasons given for the poor outcomes and high-cost.
Other sources describe the huge cost of administration of the US system where providers and insurers play a game of cate and mouse as to who will or won’t pay.
Even if the costs of care delivery are justified (which is difficult given the health outcomes) the proportion of US GDP spent on healthcare that does not provide care (that is general administration and fraud) appears to put the NHS and its supposedly ‘high’ management costs (un-evidenced apparently) in a very positive light. It would seem to be a shame if the way in which the proportion of UK GDP spent on healthcare approached that of our richer European partners only through a greater “investment’ in private administration and fraud.
I tend to agree with you
I was seeking to duck the issue by making the comment I did
I’m happy you didn’t
“Thus, the best estimate from combining these 4 studies is 34,400,000 × 0.69 × 0.0089 = 210,000 preventable adverse events per year that contribute to the death of hospitalized patients–based primarily on evidence in hospital medical records found by the GTT method”
http://journals.lww.com/journalpatientsafety/Fulltext/2013/09000/A_New,_Evidence_based_Estimate_of_Patient_Harms.2.aspx
I’d also count as fraud, the over-treatment of the privately insured (often to their detriment) and, as Lucky notes, the under-treatment of those without funds.
I’m sure it will have to be factually demonstrated but my intuition says you couldn’t help but get more corruption and fraud by privatising the NHS (because that is basically a corrupt and fraudulent move in itself).