Hospital fraud: Has it increased?


A few days ago, I got a very interesting query in my e-mail inbox:

Looking at all the hospital fraud articles made me wonder about a larger question: are we better at catching fraud or is there actually more hospital fraud, and if more, why? 
 
It is clear that when resources are scarce, people act more desperate. But it seems beyond just that. To me there is a culture shift: hospital administrations seem to be emulating the rapacious nature of some of the carriers. Since managed care arrived in the early '90s, raw capitalism has replaced patient care as the focus of hospitals and doctors alike. (There was never any question the carriers would go that way. They have no reason not to--they aren't public health advocates, and won't be until there are no other options.) ... From your vantage point, can you make sense of why this is happening? -
Physician

My feeling is as follows: On the one hand, I seriously doubt that the hospital profession as a whole has become any less ethical than it was in the past. On the other hand, as our correspondent notes, as the cost of healthcare goes up--and reimbursement goes down--its leaders are likely to be under increasing pressure to perform. I can't help but think that this has had an impact on executive behavior.

No matter how strong an ethical foundation a person has, they're going to be tempted to bend the rules if they're up against the impossible situation that many hospitals and physicians are. As Paul Levy, CEO of Beth Israel Deaconess Medical Center, notes in a recent blog item, there's no relief in sight, either: "We can project a declining rate of payment increase from both the federal and state governments, increasing the needed subsidy for those elderly and poor patients--but precisely at the time private insurers are recoiling from doing so."

On the other hand, hospital managers do face particularly intense criticism when they do something spectacularly unethical, or even distasteful--as their jobs, due to their contact with the sick, are more public than many. So this gives them a strong incentive to cut corners in less-visible places rather than commit fraud, which can explode in everyone's face.

All told, my guess is that there's no greater incidence of spectacular, front-page-style fraud then there ever was. However, there's probably more incentive to cut corners on needed services, blur the line to maximize reimbursement and engage in cut-throat competition than ever before. In short, while it might not be criminal out there, it's definitely ugly.

OK, now it's your turn, readers. Is there more hospital fraud out there than in the past? If so, why? - Anne

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