Welcome!

Agile Computing Authors: Elizabeth White, Yeshim Deniz, Liz McMillan, Pat Romanski, Larry Alton

News Feed Item

The Financial Cost of Healthcare Fraud 2014

LONDON, March 25, 2014 /PRNewswire/ --



Fraud and Error Costs Global Healthcare Sector $487 Billion (£313 Billion) Per Year

  • Since 2008 global average fraud and error losses in healthcare have risen 25% from 5.59% of expenditure to 6.99%
  • Reduction in fraud and error losses of up to 40% possible within one year - freeing up to $195bn (£125bn) globally
  • Global average loss rates suggest loss within UK National Health Service to be £7bn

The world is losing some $487bn to fraud and error annually according to a new report "The Financial Cost of Healthcare Fraud 2014" from BDO LLP, the accountancy and business advisory firm in partnership with The Centre for Counter Fraud Studies at the University of Portsmouth.

The findings show that global average losses within the healthcare sector have, since 2008, risen 25% to 6.99%. When taken as a proportion of global healthcare expenditure of $6.97 trillion (£4.48 trillion) this equates to $487 billion (£313 billion) lost in a year equivalent to:

  • More than three times the UK NHS budget for 2011/12;
  • Two and a half times the total healthcare expenditure of Canada for 2011;
  • Almost one fifth of the United States' total healthcare expenditure for 2011 and more than 27% of European Union Countries total healthcare expenditure for the same period

Fortunately counter fraud exercises have shown that it is possible to significantly reduce the losses with a reduction of 40% within 12 months being considered a very reasonable expectation. This in itself would see global healthcare resources increased by as much as $195bn (£125bn).

Case Study

In the UK's National Health Service (the second largest organisation in the world) between 1998 and 2006 losses were reduced by up to 60%. Statistics from the UK's National Fraud Authority Indicator 2013 suggest that fraud within the NHS was £229m in 2013 however, applying the global average percentage loss rate suggests, that if the NHS was in line with the rest of the world, a figure nearer £7bn would be more likely. To accept the figure of £229m would be to accept that the NHS is doing more than 30 times better than the rest of the world in preventing and detecting fraud and error. Dr David Evans, the Director of Health Systems Financing for the World Health Organisation (WHO) describes the report's conclusions as "convincing" in his Foreword, while Dr Simon Peck, a Founder of the Health Insurance Counter Fraud Group (HICFG), a UK industry group of 29 leading healthcare insurance companies, writes in his preface that those "who have the power to make a difference" should read the report.

Jim Gee, Director of Counter Fraud Services at BDO LLP added:

"The global financial crisis has had a significant impact on governments, corporates and individuals ability to meet the rising cost of their healthcare requirements. These budgetary constraints could, however, be vastly improved with a concerted effort to measure, manage and minimise the cost of fraud and error within the relevant organisations, particularly if this was supported by legislative requirement. Our conservative estimate is that by tackling this problem seriously, healthcare organisations globally could free up $195bn which is currently lost. This would make a material difference to the lives of millions of people around the world."

The full BDO Financial Cost of Healthcare 2014 report can be found at http://www.bdo.co.uk/services/forensic-accounting/fraud-and-financial-investigations/counter-fraud-services

About the report

The Financial Cost of Healthcare Fraud 2014 Report renews research first undertaken in 2009 and repeated in 2011, collating the latest accurate, statistically valid information from around the world about the real financial cost of healthcare fraud and error (as opposed to the cost of detected or reported fraud). In all, the report evaluates 92 separate loss measurement exercises covering 14 different types of healthcare expenditure totalling over $2.99 trillion (£1.93 trillion) in 33 organisations from 6 countries. The data which forms its conclusions is held in the largest fraud loss measurement database in the world with data collated over 15 years. The data is derived from accurate, statistically valid loss measurement exercises and relates to total losses, not just what has been detected or reported, which is only a small proportion of the total cost.

The report represents another output of the fruitful collaboration between BDO LLP, the leading accountancy and business advisory services firm, and the Centre for Counter Fraud Studies at the University of Portsmouth (CCFS), Europe's leading fraud research centre.

Note to editors

About BDO

Service provision within the international BDO network of independent member firms ('the BDO network') is coordinated by Brussels Worldwide Services BVBA, a limited liability company incorporated in Belgium with its statutory seat in Brussels.

Each of BDO International Limited (the governing entity of the BDO network), Brussels Worldwide Services BVBA and the member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Nothing in the arrangements or rules of the BDO network shall constitute or imply an agency relationship or a partnership between BDO International Limited, Brussels Worldwide Services BVBA and/or the member firms of the BDO network. 

BDO is the brand name for the BDO network and for each of the BDO member firms.

The combined fee income of all the BDO Member Firms, including the members of their exclusive alliances, was $6.45 billion in 2013. The global network provides advisory services in 147 countries, with more than 56,000 people working out of 1,264 offices worldwide.

UK Contacts
Jim Gee, BDO LLP
Tel: +44(0)20-7893-2830
Email: [email protected]

http://www.bdo.co.uk/press
http://twitter.com/BDOaccountant

Ged Brumby, Smithfield Consultants
Tel: +44(0)20-7903-0674
Mobile: +44(0)7540-412-301
Email: [email protected]

BDO USA Contacts

Melissa Kvitko
Bliss Integrated
Tel: +1-646-386-2923
Email: [email protected]

http://www.bdo.com/industries/health/

SOURCE BDO LLP

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-security...
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, will discuss how by using...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japanese Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ruby Development Inc. builds new services in short period of time and provides a continuous support of those services based on Ruby on Rails. For more information, please visit https://github.com/RubyDevInc.
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.
Organizations do not need a Big Data strategy; they need a business strategy that incorporates Big Data. Most organizations lack a road map for using Big Data to optimize key business processes, deliver a differentiated customer experience, or uncover new business opportunities. They do not understand what’s possible with respect to integrating Big Data into the business model.
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...