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Healthcare Fraud Stronger Than Ever

 Healthcare Fraud Is Way More Than
Just Medicare & Medicaid

Healthcare fraud on the riseIn the Introduction to Our Healthcare Sucks (why beat around the bush?), I lay out the case for healthcare being the most corrupt industry in America.

It’s not a hard case to make – and this graph of pending cases from the FBI shows it’s only getting worse (click on image for details).

The following table from the Introduction to Our Healthcare Sucks makes it crystal clear…
healthcare dominates federal fraud settlements

This remains the most recent data from the Taxpayers Against Fraud (TAF) web site, but the good folks at Public Citizen – parent organization of, a subscription service I highly recommend for anyone on medications – have updated the list.

And guess what? It’s gotten even worse, as the above table of pending fraud cases through 2011 from the FBI illustrates.

And since then, it continues to worsen. 2012 was a record year for medical fraud in America.

To quote Public Citizen, “Since 2009, the federal government has concluded almost as many settlements and recovered more in financial penalties as it had in the previous 18 years combined”.

So while some may have thought my labeling healthcare the “Most corrupt industry in America” an exaggeration or unduly alarmist, the evidence tells us it wasn’t alarmist enough. Because the problem isn’t going away. The industry – and the profession – haven’t found religion and mended their ways.

They just keep on keeping on with both illegal and unethical practices that not only account for much of the medical misspending that literally threatens our nation’s economic future, but also threatens the lives of its citizenry.

Nobody’s even come close to catching up with healthcare for fraud settlements with the federal government. Not the defense industry, not Big Oil, not banks…nobody.

In fact, all of these other industries combined can’t match our healthcare industry – in which we invest so much blind trust – for sheer corruption.

That’s bad enough. But it doesn’t begin to paint the full picture of corruption in our healthcare industry – the likes of which would make Tony Soprano blush (see this post on healthcare corruption).

In addition to all ten of the top ten fraud settlements being with healthcare companies – and not just pharmaceuticals, though they dominate, but insurers and a hospital provider group as well – healthcare companies accounted for 80% of ALL fraud settlements.

That’s FOUR TIMES the fraud settlements of all other industries combined.

Think about that for just a moment. It’s staggering.

It’s so staggering I’m going to repeat it – because it can’t be repeated too often.

FOUR TIMES the fraud settlements of all other industries combined.

If that isn’t enough to shake patients and consumers from their complacency about casually placing their lives in the hands of such an industry, then they deserve what they get – or they would if they knew about it.

Marcus Welby Is Long Gone

Of course, they don’t. Marcus Welby, M.D. is still very much alive in the imaginations of most patients when they subject themselves and their loved ones to medical treatments.

But all this fraud stuff is by those corporate types – “Big Bad Pharma” – not our own doctors, right? Surveys show that’s what most Americans think.

If that’s what you’re thinking, then you have little appreciation for just how intertwined – and interdependent – mainstream medical practice is with Big Bad Pharma.

It’s not some grand conspiracy to defraud payers and patients, however. It’s just how medical practice has evolved – or devolved – over decades of medical research corrupted by corporate funding and medical “education” by pharmaceutical reps. I quote in the book several former editors of The New England Journal of Medicine and the Journal of the American Medical Association who’ve come to the same conclusion.

And it’s penetrated both medical research and clinical practice. Here’s a graph from a study in the Journal of Medical Ethics showing the enormous growth in study retractions in American medical research. The parabolic blue line is the rate of retractions due to fraud and error vs. the volume of research represented by the green bars:

healthcare fraud starts with research fraud
And the conflicts of interest in clinical practice foster unethical bill-padding that accounts for much of why our healthcare costs in America are double those of other developed countries. Here’s a quick visual summary excerpted from Our Healthcare Sucks and how they impact your medical care:

conflicts of interest are pervasive in American medical care

It is what it is – part and parcel of mainstream medical practice in America today. Few will deny it and many conscientious medical leaders decry it as well, albeit couched in more neutral academic language than mine.

But why be politically correct when something as outrageous as this is allowed to fester in a profession to which so many entrust their very lives?

Soft Fraud

I describe in the book the broader phenomenon I call “soft fraud” in which the black-and-white defrauding of federal and state governments morphs into grayer shades of everyday medical practices that unethically pad the bills of doctors and hospitals across America.

Good doctors are rightfully embarrassed that their profession has been tainted by unethical medical practices like…

  • Over a million arthroscopic surgeries performed every year in America on arthritic knees – despite the surgical society finding no value in these surgeries several years ago;

  • Spinal fusion surgeries that vary by twenty-fold in various parts of the country – according to the esteemed research out of the Dartmouth Atlas Project; and

  • Physicians referring patients to facilities and services in which they have ownership interests – a practice shown to increase costs for these services by up to 7 1/2 times.

These are rip-offs, plain and simple. And often very dangerous rip-offs that steal more than money from their victims.

They may not always cross the line into what we currently define as illegal, but they clearly violate medical codes of ethics. And their consequences can prove far more harmful than those of most of the illegal fraud activity in America.

So it’s not a shade better than illegal fraud activity – it’s often far worse despite not being “illegal” (though it should be). For this reason, I lump them together as “medical corruption” – and I’m not the first to conclude that medical research, and too often medical practice, in America has been corrupted by commercial interests and outright greed.

But don’t just take my word for it. The following brief video features one such learned voice in the wilderness of medical profiteering, Dr. Walter Bortz of the Stanford University School of Medicine.

The Exceptions Are A Dying Breed

Now, is it all doctors? Of course not. And the ones who might stumble upon this post and bother to read it are likely to be among the exceptions.

It’s a pretty safe bet that doctors who follow me on Twitter, for example, aren’t guilty of such unethical behaviors. The ones who “unfollow” – and there have been a handful out of a couple hundred who do – probably aren’t guilty of it either.

More likely, they’re just uncomfortable with what they perceive as my heavy-handed approach to the problem.

I make no apologies for this – because it’s not just a problem. It’s a crisis. Not some trumped up crisis like the bogus “fiscal cliff” fiasco we just endured, or the contrived debt ceiling crisis now unfolding (again).

Not even the very real crisis of global warming/climate change compares. For all its seriousness, this pales in comparison to the immediate and life-threatening effects of medical corruption and malfeasance that’s responsible for more American deaths every year than any terrorist group.

This is no context for measured language – leave that for the politicians and the academics.

It’s an alarm that needs sounding. And alarms are meant to be shrill.

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