NHS & Market Forces: Unnecessary Rx & Fraud

Do we ever learn?

Winter’s Tale/Tristram Kenton Guardian

In the current push for applying market principles, the NHS is in serious danger of paying dearly for unnecessary treatment and worse, fraudulent claims by the new “suppliers” in the market place.

I have highlighted the problems in the US before. Fraud is seen as more profitable than drug dealing.

The US Medicare and Medicaid systems are in a way very similar to what the new market style NHS will be like. Tax-payers pay for them! The much hyped saving, if there is going to be any, will be swallowed up by paying for unnecessary treatment and fraud.

By how much? In the US:

WASTE IN THE U.S. HEALTHCARE SYSTEM PEGGED AT $700 BILLION IN REPORT FROM THOMSON REUTERS

26 OCT 2009

Reuters pdf

The U.S. healthcare system wastes between $600 billion and $850 billion annually, according to a white paper published by Thomson Reuters.

The report identifies the most significant drivers of wasteful spending - including administrative inefficiency, unnecessary treatment, medical errors, and fraud - and quantifies their cost. It is based on a review of published research and analyses of proprietary healthcare data.

"The bad news is that an estimated $700 billion is wasted annually. That's one-third of the nation's healthcare bill," said Robert Kelley, vice president of healthcare analytics at Thomson Reuters and author of the white paper. "The good news is that by attacking waste, healthcare costs can be reduced without adversely affecting the quality of care or access to care.

Unnecessary Care (40% of healthcare waste): Unwarranted treatment, such as the over-use of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending.

Fraud (19% of healthcare waste): Healthcare fraud costs $125 billion to $175 billion each year, manifesting itself in everything from fraudulent Medicare claims to kickbacks for referrals for unnecessary services.

“The Federal Bureau of Investigation (FBI) estimates that fraudulent billings to public

and private healthcare programs are 3-10 percent of total health spending, or $75–$250

billion in fiscal year 2009.”

“Fraud and abuse” occupies the extreme end of the continuum of appropriateness of use and potential waste. While arguments can be made about the appropriateness of some of the care described in the previous section, and, therefore, its classification as waste, no reasonable argument can be made for the contribution of fraud and abuse to quality of care or outcomes. They are cases of intentional misrepresentation resulting in excess payment, including billing for services never rendered and the knowing provision of unnecessary care. Most fraudulent and abusive practices simply add cost with no value, but others actually expose patients to the risk associated with unnecessary procedures.

Practices leading to waste include:

• The intentional provision of unnecessary or inappropriate services

• Billing for services never provided, often with patients’ participation in the fraud, often for

deceased patients

• Misrepresentation of the cost of care by insurers to group plan sponsors

• Kickbacks for referrals for unnecessary services

• Misbranding of a drug by a pharmaceutical company

• Abuse of the healthcare system by patients to receive harmful services, such as Medicaid  recipients with drug addictions enrolling in multiple states.

Administrative Inefficiency (17% of healthcare waste): The large volume of redundant paperwork in the U.S healthcare system accounts for $100 billion to $150 billion in spending annually.

Healthcare Provider Errors (12% of healthcare waste): Medical mistakes account for $75 billion to $100 billion in unnecessary spending each year.

Preventable Conditions (6% of healthcare waste): Approximately $25 billion to $50 billion is spent annually on hospitalizations to address conditions such as uncontrolled diabetes, which are much less costly to treat when individuals receive timely access to outpatient care.

Lack of Care Coordination (6% of healthcare waste): Inefficient communication between providers, including lack of access to medical records when specialists intervene, leads to duplication of tests and inappropriate treatments that cost $25 billion to $50 billion annually.

Full Report: Reuters

Hermione: "You pay a great deal too dear for what's given freely". -

(Act I, Scene I). The Winter’s Tale.

Health Care Fraud: US Medicare & NHS Reform

Enemy Of The People: NHS, Internal Market & Safety Net

NHS: Market Forces, Genuine Medicine & BMA

NHS: Changes Or A Conspiracy Against The Public Interest