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> And absolutely nowhere in the article does it talk about how the cost of preventing fraud by single practitioners is the similar to the cost of investigating
by Daniel_Newby 14y ago
> And absolutely nowhere in the article does it talk about how the cost of preventing fraud by single practitioners is the similar to the cost of investigating a single hospital.
This is not even remotely plausible. Forensic accounting and investigation has a cost roughly proportional to the number of transactions. Transactions do not become magically cheaper to investigate merely by conducting them on the same real estate.
- ChuckMcM 14y agoThere have been a number of stories on this and ABC news did a pretty good 20/20 segment on it as well. The math works sort of like this, one investigator's salary is $S, and one investigator can handle one transaction 'stream' in real time. We'll call $D the number of transactions a doctor is approving, and 'N' the number of doctors making transactions. Hospitals tend toward either 'having fraud' or 'not having fraud' so the one investigator ($S) covering a hospital can decrease the at risk transactions by Nh*$D where 'n' is the number of Doctors at the hospital. To investigate a private practice you have a small number of doctors "Ns" and busting them recovers a much smaller 'transactions per investigator' value. So an investigator looking into one doctor doesn't have an impact on the other doctors that have private practice in the same building. As the cost of investigation is part of the budget (as are the payouts) you can afford to give more of the budget payout to Hospitals because your your per doctor investigator cost is lower. (zero sum game here).
- Daniel_Newby 14y agoThanks, those are good points. It sounds like they need good automated analytics to find suspicious cases for deeper review.