News Feed Item

The Financial Cost of Healthcare Fraud 2014

LONDON, March 25, 2014 /PRNewswire/ --

Fraud and Error Costs Global Healthcare Sector $487 Billion (£313 Billion) Per Year

  • Since 2008 global average fraud and error losses in healthcare have risen 25% from 5.59% of expenditure to 6.99%
  • Reduction in fraud and error losses of up to 40% possible within one year - freeing up to $195bn (£125bn) globally
  • Global average loss rates suggest loss within UK National Health Service to be £7bn

The world is losing some $487bn to fraud and error annually according to a new report "The Financial Cost of Healthcare Fraud 2014" from BDO LLP, the accountancy and business advisory firm in partnership with The Centre for Counter Fraud Studies at the University of Portsmouth.

The findings show that global average losses within the healthcare sector have, since 2008, risen 25% to 6.99%. When taken as a proportion of global healthcare expenditure of $6.97 trillion (£4.48 trillion) this equates to $487 billion (£313 billion) lost in a year equivalent to:

  • More than three times the UK NHS budget for 2011/12;
  • Two and a half times the total healthcare expenditure of Canada for 2011;
  • Almost one fifth of the United States' total healthcare expenditure for 2011 and more than 27% of European Union Countries total healthcare expenditure for the same period

Fortunately counter fraud exercises have shown that it is possible to significantly reduce the losses with a reduction of 40% within 12 months being considered a very reasonable expectation. This in itself would see global healthcare resources increased by as much as $195bn (£125bn).

Case Study

In the UK's National Health Service (the second largest organisation in the world) between 1998 and 2006 losses were reduced by up to 60%. Statistics from the UK's National Fraud Authority Indicator 2013 suggest that fraud within the NHS was £229m in 2013 however, applying the global average percentage loss rate suggests, that if the NHS was in line with the rest of the world, a figure nearer £7bn would be more likely. To accept the figure of £229m would be to accept that the NHS is doing more than 30 times better than the rest of the world in preventing and detecting fraud and error. Dr David Evans, the Director of Health Systems Financing for the World Health Organisation (WHO) describes the report's conclusions as "convincing" in his Foreword, while Dr Simon Peck, a Founder of the Health Insurance Counter Fraud Group (HICFG), a UK industry group of 29 leading healthcare insurance companies, writes in his preface that those "who have the power to make a difference" should read the report.

Jim Gee, Director of Counter Fraud Services at BDO LLP added:

"The global financial crisis has had a significant impact on governments, corporates and individuals ability to meet the rising cost of their healthcare requirements. These budgetary constraints could, however, be vastly improved with a concerted effort to measure, manage and minimise the cost of fraud and error within the relevant organisations, particularly if this was supported by legislative requirement. Our conservative estimate is that by tackling this problem seriously, healthcare organisations globally could free up $195bn which is currently lost. This would make a material difference to the lives of millions of people around the world."

The full BDO Financial Cost of Healthcare 2014 report can be found at http://www.bdo.co.uk/services/forensic-accounting/fraud-and-financial-investigations/counter-fraud-services

About the report

The Financial Cost of Healthcare Fraud 2014 Report renews research first undertaken in 2009 and repeated in 2011, collating the latest accurate, statistically valid information from around the world about the real financial cost of healthcare fraud and error (as opposed to the cost of detected or reported fraud). In all, the report evaluates 92 separate loss measurement exercises covering 14 different types of healthcare expenditure totalling over $2.99 trillion (£1.93 trillion) in 33 organisations from 6 countries. The data which forms its conclusions is held in the largest fraud loss measurement database in the world with data collated over 15 years. The data is derived from accurate, statistically valid loss measurement exercises and relates to total losses, not just what has been detected or reported, which is only a small proportion of the total cost.

The report represents another output of the fruitful collaboration between BDO LLP, the leading accountancy and business advisory services firm, and the Centre for Counter Fraud Studies at the University of Portsmouth (CCFS), Europe's leading fraud research centre.

Note to editors

About BDO

Service provision within the international BDO network of independent member firms ('the BDO network') is coordinated by Brussels Worldwide Services BVBA, a limited liability company incorporated in Belgium with its statutory seat in Brussels.

Each of BDO International Limited (the governing entity of the BDO network), Brussels Worldwide Services BVBA and the member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Nothing in the arrangements or rules of the BDO network shall constitute or imply an agency relationship or a partnership between BDO International Limited, Brussels Worldwide Services BVBA and/or the member firms of the BDO network. 

BDO is the brand name for the BDO network and for each of the BDO member firms.

The combined fee income of all the BDO Member Firms, including the members of their exclusive alliances, was $6.45 billion in 2013. The global network provides advisory services in 147 countries, with more than 56,000 people working out of 1,264 offices worldwide.

UK Contacts
Jim Gee, BDO LLP
Tel: +44(0)20-7893-2830
Email: [email protected]


Ged Brumby, Smithfield Consultants
Tel: +44(0)20-7903-0674
Mobile: +44(0)7540-412-301
Email: [email protected]

BDO USA Contacts

Melissa Kvitko
Bliss Integrated
Tel: +1-646-386-2923
Email: [email protected]


More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, will discuss how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team a...
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
SYS-CON Events announced today that Cemware will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Use MATLAB functions by just visiting website mathfreeon.com. MATLAB compatible, freely usable, online platform services. As of October 2016, 80,000 users from 180 countries are enjoying our platform service.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
SYS-CON Events announced today that eCube Systems, the leading provider of modern development tools and best practices for Continuous Integration on OpenVMS, will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. eCube Systems offers a family of middleware products and development tools that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...