U.S. Health Fraud Prosecutions On The Rise
Healthcare fraud, the "crime of the '90s," is getting more aggressively prosecuted, according to a recent report by the Department of Justice. The crackdown signals a strong message for hospital communicators to advise upper management on preemptive measures to avoid federal investigation.
Reducing healthcare fraud, which accounts for 10 percent of all U.S. healthcare spending, or $100 billion annually, has been a key focus of U.S. Attorney General Janet Reno's office for the past two years and the number of health-related investigations and prosecutions have soared between 1992 and 1996:
- FBI health-related investigations tripled to 2,200 cases.
- Criminal prosecutions increased from 83 cases to 246 cases.
- Civil health fraud cases rose dramatically from 270 in 1992 to 2,488 in 1996.
Reno conceded it was hard to distinguish between how much fraud itself was on the rise and how much was more aggressive detection and prosecution. Among the fraud cases highlighted in the report were a Boston company that sold heart catheters not approved for use in humans and a San Diego doctor who was performing eye surgery on people who didn't need it. (Department of Justice, 202/514-2000)
While Medicare Goes Broke, Preferred Providers Cash In
The swollen profit margins of preferred provider systems might shrink when Medicare's penny-pinching ways catch up to them, according to a new survey by Atlanta-based Deloitte & Touche, LLP accounting firm and VHA, Inc. (Irving, Texas), a healthcare performance improvement company.
Substantial profit margins by preferred provider systems are a clear sign that health systems are successfully controlling their costs, which could indicate to Medicare that its payments are boosting profits and operating margins, according to the survey titled "Redesigning Health Care for the Millennium, A 1997 Assessment of the Health Care Environment in the United States."
After having double-digit profits in the '80s, operating margins dipped in the early '90s. Now they're on the rise again: HMOs are performing well financially in most markets due to the success of for-profit plans keeping their medical loss ratios lower than not-for-profits. So the survey seems to penalize systems that are reducing costs, according to Marci Thomas, D&T's director.
But the survey also predicts significant growth in Medicare managed care enrollment, which may offset the reduction in preferred provider payments, a trend that is especially aggressive in Florida and California. In Florida, 26% of its population is enrolled in an HMO with 35% being managed care recipients. And, in California, the HMO penetration is 42% with 28% on Medicare. (VHA, Inc. 972/915-3000; D&T, 404/220-1500)
California Birth Study Shows Major Population Shift
The birthrate among Latinos in Orange County has outpaced that of whites since 1992, and the overall birthrate for girls aged 10 to 14 years old has surged 10 times faster than the national average birthrate, according to recent findings from a study released by the Orange County Health Care Agency. The findings have marketing consequences for healthcare, education, criminal justice and the business sector.
Its "Trends in Birth Outcomes: Orange County (1984-1993)" describes a rapidly changing demographic landscape in which the Latino population is catching up with the white majority through a higher birthrate, particularly among the young. The report's key findings include:
- Between 1984 and 1993, there were 585 births to girls 10 to 14; of those 72% were Latinos. (The study only looked at births, not all pregnancies.)
- In 1992, the Latino birthrate began to shift, exceeding those of whites. In 1993, Latino births were 23,247, compared with 21,253 white births.
- While the overall rates of prenatal care in Orange County were good compared to national figures, Latinos and Asians fared worse than other ethnic groups. While 93% of whites and 80% of blacks received prenatal care in 1993, only 70% of Asians and 69% of Latinos did so. (Orange County Health Care Agency, 714/834-4722)