10 Shocking Facts About Canada’s Healthcare System – Part 1

September 14, 2018

Fact: If Unchecked, Fraud Will Collapse The Country’s Vaunted Healthcare System In Just A Few Years

Part 1. Canada’s Health System Is Out Of Control

The Canadian Institute for Health Information (CIHI) reports Canada’s health care industry takes in an estimated $242 billion annually or just over $6,600 for every man, woman and child.

Canada’s healthcare spend is roughly the size of Finland’s entire economy, per the World Bank. It is more massive than the economies of Portugal, Greece, and New Zealand, and it dwarfs the gross domestic product of 146 additional countries.

But since most people can’t really get a grasp on what one billion is, let alone hundreds of billions, let’s put it this way:

Canada’s healthcare spend is a staggering $27.6 million per hour or $460,426 every minute of every day – 24/7, around the clock.

It is more money than any other area of the economy and dominates the country’s budgets every year.

It is getting worse

The cost is growing exponentially. The 2017 estimated cost is up from 2016 by almost $200 per person. In the year 2000, Canada’s health care spend was roughly half of what it presently is, so it has more than doubled in record time — it is, in fact, a 142 per cent increase over the course of 18 short years.

The most significant percentage cost growth has been for drugs which now account for 16.4% of the healthcare spend. That’s $39.7 billion (with a “b”), or $1,086 per person. This represents a 4.2% cost increase, double Canada’s annual inflation rate for 2017.

How much is stolen

How much of this cost is due to needless or even fraudulently prescribing or dispensing? A lot, according to Karen Voin of the Canadian Life and Health Insurance Association. She estimates that between 2 and 10 percent of healthcare dollars are lost to fraud.

So, let’s take the average of 6%. That means that we are losing $2.4 billion (again, with a “b”) every year to – and let’s call it what it is – the criminal element.

In Ontario alone, it works out to $118 million lost each year. And what does the Ontario Ministry of Health and Long-Term Care do about it? Almost nothing, sad to say. The Ministry recovers only a small portion of it. Bonnie Lysyk, the Auditor General, puts the number at a measly $5 million, or about 4.2% of what was stolen from us.

Your government doesn’t care

And even when the Province can be bothered to put on a show of looking for fraud, they don’t tell the police! The Auditor General’s office revealed that for the years 2013-14 and 2014-15, the Ministry reported zero (0) suspected fraud cases to the OPP. In 2015-16, the Ministry reported two cases.

We don’t just mean little or no suspected prescription drug related fraud cases were reported by the Ministry – we mean that little or no suspected healthcare fraud of any description was reported.

In August 2016, the Ontario Provincial Police (OPP) Anti-Rackets Health Fraud Investigation Unit had to take matters in their own hands and approach the Ministry to ask why they weren’t sending any files for investigation. (Perhaps the OPP should be investigating the Ministry.)

These are significant facts

And the most astounding fact of all is that no one is minding the shop. Not one health minister. Not one premier. And certainly not the Prime Minister of Canada.

Don’t believe us? Just call Canada’s Minister of Health’s office at 613-957-0200 and ask. You will be astounded. There is not a single agency that even cares what happens with the $662 million they give the provinces every single day!

Could this unconscionable negligence be the reason that Canada’s healthcare fraud is out of control? Because it is. In fact, it is so out of control it is threatening to bankrupt the country.

This is one of a 10-part series. Stay tuned for Part 2, coming soon!

10 Shocking Facts About Canada’s Healthcare System – Part 2

September 11, 2018

Part 2. Fraud Costs Canadian Taxpayers $14.5 Billion Annually

If you have not read part one, read it here.

In his book “License To Steal: How Fraud bleeds America’s Health Care System”, Malcolm K. Sparrow, a professor with the Kennedy School of Government at Harvard University says:

“Health care fraud remains uncontrolled, and mostly invisible. For Americans, this problem represents one of the most massive and persistent fiscal control failures in their history.

“Many who work the system, or feed off it, like it so.

“For those who profit from it, health care fraud is not seen as a problem, but as an enormously lucrative enterprise, worth defending vigorously.”

In the U.S. numerous sources agree that fraud is at least 10% of all health expenditures, and the U.S. is a country that aggressively pursues health criminals to protect taxpayers – we don’t.

That is not to say that healthcare fraud is not an issue in the U.S. The U.S. National Healthcare Anti-Fraud Association estimates the loss to be in the order of $80 billion each year. That is a significant amount of money, but it is interesting to note that the U.S. population is almost nine-fold of Canada’s population but their loss to fraud is decidedly not nine times as high as ours. In Canada the per capita loss from fraud is about 60% higher than that in the U.S based on the U.S. estimates of 10% loss while we conservative Canadians put the average figure at 6%.

How America does it

At least a part of the reason for this discrepancy is that U.S. healthcare insurers, legislators and enforcement agencies take active steps to detect fraud. And the U.S. does not just pay lip service to the issue of healthcare fraud. When they find it, they go after it with a vengeance, and the perpetrators are very likely to find themselves behind bars!

Just last year, the U.S. Attorney General Jeff Sessions announced that “federal prosecutors have charged more than 400 people in taking part in medical fraud and opioid scam that totaled $1.3 billion in fraudulent billing”. The 412 people facing criminal charges include doctors, nurses, and pharmacists who, as the Attorney General so correctly noted “have chosen to violate their oaths and put greed ahead of their patients”.
In May of this year, a New Orleans physician who had scammed Medicare to the tune of $810,556 was sentenced to prison time followed by a term of home confinement AND had to pay back the $810,556 he’d stolen.
A New Jersey psychiatrist was convicted of fraudulently signing treatment plans with the intention of misleading Medicaid inspectors. She’s presently contemplating the prospect of five years in prison and a $250,000 fine at her sentencing to be conducted in August of this year.

This is just a small sampling of the vigorous pursuit and prosecution of healthcare fraudsters in the U.S.

Our inactivity

Do the Canadian governments exercise that same diligence in protecting the taxpayers? Emphatically, no, assertions to the contrary from the various Ministries of Health notwithstanding.

In Canada public healthcare money is issued on demand and without oversight. And it is this lackadaisical incompetence that has made the Canadian governments’ “efforts” at healthcare fraud control a laughingstock as reflected in Texas attorney James Moriarty’s comment that “OHIP doesn’t have sense to pour piss out of a boot”.

The Canadian Life and Health Insurance Association reported that “All Canadians pay for healthcare fraud. In North America alone, it is estimated that 2 to 10 per cent of all healthcare dollars are lost to fraud [an average of 6 per cent].”

That’s $14.5 billion every 12 months, $39 million a day or $1.6 million per hour. Every hour, around the clock.

And do the federal and provincial governments care? Not on your nelly. They don’t even keep track of the fraud that they do, by some miracle, manage to uncover. An article in a January 2013 issue of CMAJ (Canadian Medical Association Journal) reveals that there could be “Upwards of $20 billion per year being funneled inappropriately into someone’s pockets. But a precise breakdown of how much of that is respectively attributable to physicians, or to other health professionals, pharmacies or patients is entirely unknown, as there is no standardized reporting of cases of fraud in Canada or sharing of information between jurisdictions.”

So, what is the government’s documented focus with respect to safeguarding healthcare dollars?

This is one of a 10-part series. Stay tuned for Part 3, coming soon!

10 Shocking Facts About Canada’s Healthcare System – Part 4.

August 21, 2018

Part 4. When Doctors Are Charged, You Pay Their Legal Bills!

When celebrities like OJ Simpson are accused of a crime they are responsible for paying their legal bills. When mobster Al Capone was arrested in 1931 he had to pay for his legal defense. So did Conrad Black. And Alan Eagleson. This is the case for everyone. Right?

Wrong. If you are a doctor in Canada you enjoy legal protection of the highest caliber, funded by the taxpayers!

In September 2015 the Toronto Star published a scathing indictment of a secretive and largely unknown organization, the Canadian Medical Protective Association (CMPA). Their article was entitled “Suing a doctor? Your tax dollars will be used against you: Canadian physicians are backed by $3.2-billion war chest indirectly funded in part with public money.”

“Following a medical procedure, you find yourself suffering from a serious, unexpected health issue you believe was caused by negligence. You decide to sue your doctor for pain, suffering, loss of income and the costs of care. Here’s what you may not know: you won’t just have to pay your own lawyer. Your tax dollars will finance top-flight lawyers to vigorously defend your doctor and challenge your claims.”

Yes, readers, that’s right. The CMPA is a publicly funded defense organization for doctors accused of wrongdoing. Doctors pay fees to the CMPA and then are reimbursed a hefty percentage from the public coffers, to the tune of hundreds of millions of dollars each and every year. CMPA financial statements show their membership revenue to be $566.2 million for 2016, and that expenditure has been steadily rising well ahead of the general rate of inflation. You paid most of that.

And just to add insult to injury, the egregious defense campaigns employed by the CMPA hired-gun lawyers financed out of their multi-billion dollar war chest are legendary. CMPA lawyers are notorious for their “scorched-earth” tactics of:

deny the doctor did anything wrong
delay, delay, delay
attack the plaintiff
appeal, appeal, appeal

You should also be aware the CMPA does not provide medical malpractice insurance. The CMPA provides high-priced lawyers to doctors. Very few doctors in Canada have actual liability insurance from bona fide insurance providers (they’d have to pay for that themselves). Instead, they rely on the publicly funded CMPA to get them out of any scrape they find themselves in.

And the CMPA’s financing of a doctor’s defense is not limited to medical malpractice issues; they also fund the defense of a doctor accused of civil or criminal offenses. Maimed a patient? Operated on the wrong body part? Slandered someone? Sexually assaulted a patient? Got nailed on a DUI? Committed OHIP fraud? Don’t worry – the CMPA lawyers are all over it. And don’t suppose that the doctor will lose his license to practice if convicted. The Colleges of Physicians and Surgeons, those so-called regulators of MDs and protectors of public safety, are notoriously forgiving of errant, incompetent, and even criminal doctors.

And here’s another disturbing fact: it doesn’t matter how many civil or criminal predicaments a doctor finds himself in – the taxpayer-funded CMPA lawyers will be there for him time after time.

Is it possible that you have been an unwitting and involuntary participant in healthcare fraud? Find out in part 5 of our series…

10 Shocking Facts About Canada’s Healthcare System – Part 6.

August 8, 2018

Part 6. They Have More Ways To Steal Than You Can Dream Of!

Paul Jesilow, Department of Criminology at the University of California and Bryan Burton, Department of Political Science and Criminal Justice at Southern Utah University specify that:

“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 behavior, such as pharmaceutical companies that falsify clinical tests in order to get unsafe drugs approved for use. Thousands die each year in the United States due to these behaviors, including deaths from incorrectly prescribed medications or from tainted drugs that were approved by the U.S. Food and Drug Administration based upon fraudulent testing and reporting. Thousands of additional patients likely are injured and killed by unnecessary surgeries performed by physicians who want to maximize their reimbursements. The illegal activities also add billions of dollars each year to the total healthcare cost in the U.S. Despite these costs, there is relatively little outrage as a result of the behaviors, largely because they remain hidden from public view.”

One of the greatest scams in Canadian history involved Ontario and Alberta paying hundreds of millions of dollars to American hospital chains to treat people for addiction. The hospitals had hired “bounty hunters” who picked up people off the street in Canada to send to these facilities. The “patients” were promised a vacation at taxpayer expense and when they got to the U.S., their “treatment” often consisted of barbeques with hamburgers and hot dogs. They returned in whatever condition they left, and the government paid $150,000 for each of them. And although it was widely exposed in the media, the government did everything in its power to squash the issue. The money was never recovered from the American hospital chain.

In California, there was a case of a hospital that billed Medicare for more than nine years and with more than 150 beds that earned millions of dollars in fees. There was only one problem: the hospital had never been built.

Then there were all the Ontario cases for supposed patients being treated for addiction by Methadone. The patients billed for were street people. Their identities had been procured and were being used to bill taxpayers, but it was nothing but a scam as hundreds, if not thousands, of them did not even reside in the facilities that were doing the scamming. Not to mention that none were ever recorded as cured.

In April 2016 it was exposed in the National Post, headline reading “Methadone doctor accused of coercing patients into using pharmacy linked to his clinic: Patients said the Brantford doctor threatened to cut off their take-home doses and physically walked them into the store, according to a disciplinary ruling.”

Then there are:

Billing for “phantom patients”
Billing for fabricated conditions
Billing for medical goods or services that were not provided
Billing for more hours than there are in a day
Paying or receiving a “kickback” in exchange for a referral for medical goods or services
Concealing ownership in a related company
Using false credentials
Double-billing for healthcare goods or services not provided
Billing for a non-covered service as though it were a covered service
Misrepresenting the provider of the service
Dispensing a lower-cost drug and billing for the higher-cost one
False or unnecessary issuance of prescription drugs
Billing for drugs never dispensed
Unnecessary surgery and other procedures
And several hundred more

How is it even possible that this magnitude of fraud can occur? Is it difficult or even impossible to detect? Emphatically, no. Keep reading – we cover that in part 7 of our series.

10 Shocking Facts About Canada’s Healthcare System – Part 7.

August 3, 2018

Part 7. Fraud Is Simple To Detect, Inexpensive To Find

Every credit card company has ways to detect potential fraudulent activity and they take simple steps to verify the validity of suspect charges. For instance, if they see a charge on a credit card that is atypical such as large purchases made just after small ones (which is, apparently, behaviour characteristic of a criminal with a stolen card) or a large number of online purchases or purchases that don’t fit a cardholder’s profile, they will telephone the cardholder to ask if he or she authorized the purchase. And why? Because credit card companies are intensely interested in stemming the losses they incur from fraudulent transactions.

Banks monitor for fraud all the time, and for the same reason. They use fraud detection indicators to identify anomalies such as unusually high purchases of popular items, they flag multiple accounts opened within a short period of time, they monitor usage patterns. They use readily available software that analyzes data and generates alerts.

Private insurance companies employ a variety of methods, both electronic and good old-fashioned “have a look”, to detect and discourage fraud. They employ pre-payment investigation of flagged claims, they employ forensic accountants, they monitor specific healthcare providers. They have instituted co-pays and deductibles, not just for the cost-saving component but also to give the patient incentive to refuse unnecessary treatment. Some areas of benefit particularly susceptible to fraud and abuse now have annual or even lifetime caps. Some insurance companies limit the quantity of medical accessories that they will cover.

There are software companies, service providers and many other types of business who specialize in providing fraud detection services. And some of them are very, very good at what they do.

When it comes to the government, not only do they have the budget to do this, they also have the means already in hand.

And what does the Ministry of Health and Long-Term Care do to stem the drain of tax dollars stolen by fraud? They’ve set up an email address and a hotline for “the public” to report suspected cases of health card abuse. Please.

How much time or effort would it take the Ministries of Health to do something effective in combating fraud? Take for example the Ontario Health Insurance Plan or OHIP. The Ministry does send letters to patients asking them to verify that they did receive the services that were billed for. This is not a very effective strategy, though, as the response rate from the patients is less than 2%. Instead, how about requiring that a patient sign a form after treatment verifying that the treatment and services being billed for were in fact received? Granted, that would be a nuisance for all concerned but it would make it very difficult for anyone to bill for goods and services not delivered.

Every doctor who bills OHIP has a profile in the system. Well it doesn’t take more than a single report to determine which of these are billing outside of the typical profile. So if you have, say, 1000 of a particular type of specialist in the system billing an average of $400,000 annually, the few that are billing several times that should be easily detected and flagged for investigation. The ophthalmologist who billed $6.6 million in one year springs to mind as do the 154 diagnostic radiologist who each billed OHIP $1 million or more.

Even the Ontario Minister of Health and Long-Term Care recognizes that something is wrong. Eric Hoskins was quoted in the Toronto Star as noting that “2% of doctors … take 10% of the $11.6 billion set aside to pay doctors for their services, offices, staff and equipment”. And what did the Minister propose to do about it? In a classic case of missing the boat, Hoskins wanted to cut fees payable to all doctors. If the Ministry would devote some private-sector-style effort to detecting and deterring fraud, the money that would be saved would not only more than eliminate any need for fee cuts, it would also pay for the fraud detection software, systems, and personnel.

And they can do it. But they don’t.

Are the Ministries restricted in pursuing fraud by the current legal framework? That’s covered in part 8 of our series.