RE: RE: Future Uncertainty14 Mar 2021 11:23
Healthcare services delivered under contract between the state and the private sector are particularly susceptible to cheating because of their highly complex nature, and because effective monitoring of the performance of contracts is liable to be prohibitively expensive.
Even before the large scale contracting out of healthcare services to the private sector, fraud within the NHS has been substantial, partly as a result of the contracts which have been struck with private organisations to deliver healthcare services and products.
The National Fraud Authority estimates that around £2.4 billion a year is lost through fraud when the government enters into contracts with the private sector.
Overcharging commonly happens inside the NHS but the rate nearly doubles inside the private sector:
A review of the bills from one London hospital in respect of the patients referred from one GP practice in 2008-09 found that the hospital had over-billed the PCT in respect of these patients to the tune of at least 40%. The PCT stopped checking the results after confirming this figure, because to check more would have consumed too many staff resources. It contented itself with securing a repayment from the hospital of £323,000 out of total billings for the year of £801,000.
It should be stressed that when NHS hospitals maximize income by overcharging their behaviour is not driven by the financial interest of shareholders, or of the staff involved, and while it leads to serious misallocation of resources, and needs to be dealt with, the funds do not leave the NHS. The case is different if there is over-billing by private providers.
Both the incentives to ‘cheat’ the system in this way and the opportunities for doing so are likely to increase as for profit companies are used to deliver healthcare services in the NHS. A study published in the Journal of Health Economics found that the rate of ‘upcoding’ in the US health care system was twice as high in for-profit hospitals as in non-profit hospitals.
The risks to the English NHS are increased by the fact that some companies entering the new NHS market have settled major fraud cases in the US.
Hence, as stt1 would say, there is much opportunity for fraud in the system - we don't know how much exactly.