Recent actions taken by the Health Authority for Abu Dhabi (HAAD) and the Dubai Health Authority (DHA) to uncover health insurance fraud are to be welcomed. The health authorities in the region, beginning with CCHI in Saudi Arabia, have been at the forefront of developing health insurance that is both suitable and accessible for the needs of the population. However, like elsewhere in the world, health insurance fraud poses serious issues for the medical and insurance industries.
Health insurance fraud is probably as old as the industry itself. The scope of the problem is illustrated by recent statistics from the USA, which estimate that health insurance fraud costs Medicare, one of the largest insurance programmes in the country, around US$60 billion each year. The difficulty in fighting the problem is also evident from figures which show that the number of fraudsters charged each year is up barely 2% since the US government stepped up its efforts with a major crackdown on health insurance fraud two years ago.
So, What Can a Developing Market Like the Gulf Expect Going Forward?
One of the major advantages of introducing mandatory insurance coverage in the region is that reliable statistical data, the bread and butter of any health system, can be developed. Statistics on medical data which track provider usage, trends in diagnosis, population demographics and costs are invaluable to those monitoring and regulating the medical field. It is no secret that the private insurance industry is exceptionally good at producing statistical data, and relies on this data for the running of its business. Efficient collation of this data forms the backdrop against which fraud can be detected and uncovered.
Insurance companies have strong incentives to uncover and eliminate fraud in their own schemes. Since health insurance is essentially a fee-for-service industry, weeding out medical professionals, providers and service industries that engage in fraudulent conduct simply saves the insurer money in the short run. Insurers and TPAs have a large role to play in effectively policing their own networks and programmes to monitor and deal with fraudulent conduct. The fact that networks are contractually appointed gives insurers and TPAs an effective means of dealing with any culprits, backed up by the threat of referral to the police and criminal courts if necessary.
Whilst insurers have no doubt taken fraud seriously within the context of their own schemes in the past, it is the recent advent of active health authorities in the region, which can radically transform the landscape of the industry. Health authorities have been given the mandate to reform, regulate and direct the provisions and financing of healthcare services in their respective territories. Not only can they play a large role in structuring the industry, but the legislation under which they are mandated gives the authorities extensive powers to patrol the industry as well. Early action at this stage of the market's development in taking action against those swindling the system will send a strong message to the market. Joint initiatives with the insurance industry and other stakeholders are also likely to reap positive results when combating fraud.
Continued strong growth in the health insurance industry is expected across the region for the years to come. As the healthcare net stretches out across Gulf populations, the opportunities for fraud are likely to continue to present themselves, and it will take determined and concerted efforts by the industry and regulators alike, to make sure that effective means of dealing with this plague are implemented.
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