Healthcare industry

Healthcare costs

part 1

Healthcare costs increase significantly in the past years. The reasons of increased costs include better technology, positive implications, increased insurance cost,

and healthcare fraud. Healthcare fraud is an important and visible factor associated with increasing healthcare costs. Healthcare fraud cost the country an estimated

$80 billion in 2012 (Jaeger, 2013). And it’s a rising threat, with national health care spending topping $2.7 trillion and expenses continuing to outpace inflation.

The majority of health care fraud is committed by organized crime groups and a very small minority of dishonest health care providers (Jaeger, 2013). There are some

types of health care fraud, such as billing for more expensive services or procedures than were actually provided or performed and performing medically unnecessary

services solely for the purpose of generating insurance payments.
There are some reasons for healthcare fraud, such as the complexity of medicine, the ambiguity of the payment system, limited medical knowledge for fraud investigators

(Otani & Baden, 2009). Healthcare system becomes complex: medicine becomes more technological; payment methods become more ambiguous; health policies become more

complex. Most patients know very little about medicine and they trust doctors. Because of that confusion, the healthcare industry is highly susceptible to fraud. The

government should take more effort to prevent healthcare fraud. The federal government should create a National Fraud Research Center to be in charge of funding and

performing fraud research throughout the country, and training all the FBI’s Fraud Investors. The Research Center could be funded by the money that is returned from

fraud convictions.

Part 2

I think that the main reason that the United States healthcare system has suffered significant losses due to fraudulent activities, is due to the fact that healthcare

managers have not been properly trained in detecting and preventing these activities. It appears that the level of training that these managers do receive, is being

outpaced by the highly technical methodologies that are utilized by individuals that are committing fraud. I also think that this problem can be solved by ensuring

that managers are able to obtain recurring training concerning identity theft and its impact upon healthcare organization financial losses, as well as to ensure that

all of the accounting and financial staff within healthcare organizations are well trained in detecting fraudulent activity. According to Gee, Button & Brooks (2011),

“healthcare fraud is a challenging issue which has a direct and negative impact on human life, thereby leading to less funds availability to have a high quality

patient care”.


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