Criminology Healthcare Fraud
by
Paul Jesilow, Bryan Burton
  • LAST MODIFIED: 27 March 2014
  • DOI: 10.1093/obo/9780195396607-0157

Introduction

Healthcare fraud involves wide-ranging illegal behaviors. It includes such activities as individual physicians who bill insurance companies or the government for services that were never provided as well as corporate behaviors, such as pharmaceutical companies that falsify clinical tests to get unsafe drugs approved for use. Healthcare fraud, similar to other white-collar crimes, has three general costs: financial, physical, and social. The United States is likely the largest financial victim of healthcare fraud in the world. This is in part because the United States unquestionably outspends other advanced industrial nations, in terms of both total expenditures on health as a percentage of gross domestic product and expenditures on health per capita. Simply put, more money available in the United States for health care likely translates into more opportunities for fraudulent activities and more monies lost due to these illegal acts. Healthcare fraud also has a physical cost. Thousands of patients in the United States die from prescription medications that were incorrectly prescribed or from tainted drugs that were approved by the US Food and Drug Administration as a result of fraudulent testing and reporting. Thousands of additional patients are injured and killed by unnecessary surgeries performed by physicians who want to maximize their reimbursements. Social costs are also associated with healthcare fraud. Social costs cannot be numerically calculated, and they include a loss of trust in the medical profession. The financial, physical, and social costs of healthcare fraud are likely substantial in all advanced industrial nations.

General Overviews

Published overviews of healthcare fraud in the United States and other developed countries are available. Savedoff and Hussmann 2006 provides a brief introductory discussion on the factors that make various healthcare systems around the world susceptible to corruption and fraud. This book chapter is clearly written and can be easily understood by undergraduate students and new researchers. Rosoff, et al. 2010 offers a general discussion on healthcare fraud and then present examples of common fraud schemes committed in the United States by providers (e.g., physicians), by suppliers (e.g., durable medical equipment companies), and by patients. The citations employed in this textbook chapter can also serve as a springboard for directing researchers to other relevant and important work on healthcare fraud. Rosoff, et al. 2010 provides the best initial reading on healthcare fraud for undergraduates and new researchers. Jesilow, et al. 1993; Leap 2011; and Sparrow 2000 each deliver comprehensive analyses of healthcare fraud and abuse in the United States. These books are generally for more advanced researchers, but they are also accessible to undergraduates and new researchers. Jesilow, et al. 1993 looks specifically at how doctors defraud Medicaid (a program that pays for the health care of indigent individuals in the United States), and they discuss early anti-fraud enforcement efforts in the program. Leap 2011 details common fraud schemes throughout the healthcare system in the United States and then presents approaches for reducing criminal and corrupt behaviors. Sparrow 2000 clearly highlights the challenges and complexities of fraud control in the United States and offers a model fraud control strategy. The World Health Organization 2011; Brooks, et al. 2012; and Mackey and Liang 2012 provide good general overviews of healthcare fraud around the world. A brief publication, World Health Organization 2011, provides general estimates of healthcare fraud in various countries and a discussion on the strategies nations are employing in their attempts to reduce and stop fraudulent activities. This piece is accessible to undergraduates. Brooks, et al. 2012 provides the first international estimates for healthcare fraud, which suggest the substantial scale of the behavior around the world. Mackey and Liang 2012 discusses how healthcare fraud activities transcend borders (e.g., counterfeit medicines can be exported to other countries). Both of the preceding articles are recommended for advanced researchers. Braithwaite 1984 documents how pharmaceutical companies are able to use their worldwide reach in order to get dangerous drugs approved by using fraudulent and corrupt activities.

  • Braithwaite, John. 1984. Corporate crime in the pharmaceutical industry. London: Routledge & Kegan Paul.

    E-mail Citation »

    This book is a classic in criminology, which details worldwide corporate crime in the pharmaceutical industry. Chapter three specifically deals with healthcare fraud by highlighting several cases where drug companies knowingly falsified clinical tests and misrepresented dangerous side effects of drugs to regulators. This book is suggested for advanced researchers.

  • Brooks, Graham, Mark Button, and Jim Gee. 2012. The scale of health-care fraud: A global evaluation. Security Journal 25:76–87.

    DOI: 10.1057/sj.2011.7E-mail Citation »

    This article provides estimates for the costs of healthcare fraud in six countries: the United Kingdom, United States, France, Belgium, the Netherlands, and New Zealand. There is also a useful discussion on measuring the extent of healthcare fraud.

  • Jesilow, Paul, Henry Pontell, and Gilbert Geis. 1993. Prescription for profit: How doctors defraud Medicaid. Berkeley: Univ. of California Press.

    E-mail Citation »

    This book is based upon interviews with healthcare fraud investigators, high-ranking government officials, and offenders. The authors discuss early patterns of fraud and abuse in Medicaid and early attempts by the government to stop fraud in the program.

  • Leap, Terry L. 2011. Phantom billing, fake prescriptions, and the high cost of medicine: Health care fraud and what to do about it. Ithaca, NY: Cornell Univ. Press.

    E-mail Citation »

    This book provides an in-depth discussion on the causes of healthcare fraud, major healthcare fraud laws, and the common fraud schemes that occur. Particularly useful for criminologists is the chapter on the numerous ways to combat healthcare fraud and abuse.

  • Mackey, Tim, and Bryan Liang. 2012. Combating healthcare corruption and fraud with improved global health governance. BMC International Health and Human Rights 12:1–7.

    DOI: 10.1186/1472–698X-12-23E-mail Citation »

    The article demonstrates that healthcare fraud in one nation can impact the health outcomes of other nations. The authors call for global cooperation to fight healthcare corruption and suggest a number of policies to address the problem.

  • Rosoff, Stephen, Henry Pontell, and Robert Tillman. 2010. Medical crime. In Profit without honor: White-collar crime and the looting of America. By Stephen Rosoff, Henry Pontell, and Robert Tillman, 495–532. Boston: Prentice Hall.

    E-mail Citation »

    An accessible textbook chapter that examines some of the major forms of medical crimes, provides illustrative case studies of healthcare fraud, discusses law enforcement difficulties, and highlights developing areas for future concern.

  • Savedoff, William, and Karen Hussmann. 2006. Why are health systems prone to corruption? In Global corruption report 2006. By Transparency International, 4–13. London: Pluto.

    E-mail Citation »

    This book chapter is particularly important, since it informs readers of the unique features of healthcare systems that make them vulnerable to fraud and corruption. This chapter is a good starting point for researchers who want to obtain a general overview of healthcare fraud.

  • Sparrow, Malcolm K. 2000. License to steal: How fraud bleeds America’s healthcare system. Boulder, CO: Westview.

    E-mail Citation »

    This book is a classic contribution to the study of healthcare fraud. It describes the complexities of healthcare fraud regulation in the United States. It is an excellent starting place for researchers and others interested in understanding the fraud control challenge.

  • World Health Organization. 2011. Prevention not cure in tackling health-care fraud. Bull World Health Organ 89:858–859.

    DOI: 10.2471/BLT.11.021211E-mail Citation »

    This brief publication provides an overview of the various healthcare fraud schemes around the world, and the numerous strategies nations are employing in their attempts to reduce and stop fraud.

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