Europe battling €100bn health fraud losses

The head of counter fraud within the NHS has told silicon.com Europe is losing tens of billions of euros each year to criminals but added that high-tech analysis and solutions are helping to turn the tide in favour of organisations such as his.

Frauds by employees, patients and suppliers is rife, as is insurance fraud but Jim Gee, CEO of the NHS counter fraud and security management service, believes it is a war he can win in order to start redirecting recovered and prevented losses back into patient care.

Gee told silicon.com: "Europe spends €1tr each year on healthcare provision and between three and 10 per cent of that will go astray."

That equates to an unimaginable sum of between €30bn and €100bn per year. The only silver lining of such a shocking statistic said Gee is that it provides a starting point from which to begin improving matters.

"We are the only organisation which measures fraud this accurately," said Gee. "We measure to within 0.1 per cent."

"We have always believed that unless you can accurately measure the extent of the problem you can't effectively solve it," said Gee.

Patient fraud actually accounts for by far the smallest amount of fraud losses within the NHS and Gee says it is falling. In 1999 losses were £171m but that figure has now fallen to £78m.

Tellingly, Gee said there were no high-tech systems in place to detect such frauds prior to 1998. Since then the organisation has been working with US business intelligence giant SAS to improve dynamic data mining and analysis.

Gee believes further implementations and a fully integrated data mining solution, which will be in place by 2006, will cut losses to "an absolute minimum by 2009" - which he defines as "losses of just under one per cent".

"You can never reduce fraud to zero because the fraudsters out there are quite creative," he added.

The healthcare professionals account for a far larger portion of fraud losses. Gee cited the case of one dentist who was recently brought to justice after stinging the NHS for £1.2m.

In such cases Gee said the NHS presses for a three-pronged punishment, to get the individual tried and sentenced, get losses recovered and get the individual struck off from future practice.

As well as a large fine and the recovery of around £750,000 the NHS froze assets including eight houses and a Mercedes S class from that one rogue dentist.

Further targeting this issue, next year a co-ordinated anti-fraud team with a pan-European focus will be established in Brussels, said Gee. It will be set up with funding from the EU but will be run as a subscription-based service, paid for by health insurance companies as well as the public and private sector.