24.09.15
Fraud could be draining almost £6bn a year from the NHS
The NHS could be losing between £3.7bn and £5.7bn a year from its £110bn cash pot due to fraud, a report has found.
The report, led by Jim Gee, the former NHS anti-fraud boss and current head of counter fraud services at PFK Littlejohn, identified major sources of fraud by pharmacists, dentists, GPs and patients in the state service.
The Department of Health said it did not recognise the figures, calling Gee’s work a “highly speculative report which is full of inconsistencies”.
Topping his list by far was payroll, estimated to drain the NHS between £555m and £1.5bn per year from a £33bn budget. It is estimated that this cost is the result of a high volume of fraud with individually low values.
Many of these come from issues with claiming qualifications, receiving allowances and false employment histories.
Procurement was also a major source (£1bn) of potential fraud as a result of overcharging for or under-providing goods and services, but the group identified a major lack of consistent data and communication between those procuring, receiving and financing goods – ultimately hindering the measurement of procurement fraud losses.
Procurement fraud ranged from that of two NHS managers, John Leigh and Deborah Hancox, who engineered a five-year procurement fraud pocketing up to £229,000 against a health authority in the north west, and more common examples of ‘high volume, low fraud’ which can easily become “embedded”.
Other examples of NHS fraud included GPs claiming for services they did not provide, creating ghost patients or accepting bribes to register overseas visitors. GP frauds accounted for around £348m of the cash pot.
Patients also committed fraud by claiming for free prescriptions, dental care and optician services they were not entitled to – while dentists claimed for dental work they had not done and pharmacists purported to store more drugs than actually dispensed.
But the report acknowledged that there were many examples of losses being “substantially reduced” where organisations provided accurate information about their nature and extent. Between 1999 and 2006, the NHS reduced losses by “up to 60%” by investing in anti-fraud measures.
But NHS Protect, the national fraud prevention and investigation body, has seen its budget slashed by around 30% since 2006 and now employs only 27 investigators.
Jim Gee, leader of the report, accused the government of cutting back on essential fraud measurement exercises, meaning it had little idea of how much money it was losing.
He added: “Fraud is one of the last great unreduced healthcare costs. Putting money into it makes absolute sense. It is one of the least painful ways of cutting costs before you cut the quality or extent of patient services.
“The best way of stopping this is not to wait for fraud to happen and then act after losses have been incurred, but to proactively deter and prevent them. Fraud is a cost to be measured, managed and minimised like any other.”
They added: “We are determined to stamp out fraud in the NHS through better information sharing to prevent and deter fraud and we are working with NHS Protect on crime risks and trends to do even more in the future.”
However the report stated that the best way to reduce losses is to “stop being in denial about them”, adding that organisations must be aware of the extent of fraud in order to apply the right solution.
In March 2014, NHE reported that, according to Gee, the NHS was losing £7bn a year to fraud – more than 20 times the official government figure.
Although Gee had based his research on worldwide fraud figures, he said that to accept that the NHS was only losing £229m instead would be to accept the NHS is doing more than 30 times better than the rest of the world in preventing and detecting fraud – which he called “implausible”. The Department of Health rejected that previous analysis too.
In his most recent analysis, Gee also looked at worldwide figures, but took into consideration NHS-specific estimates and already-detected fraud.