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!