Health Care Fraud and ROI

Today, the Obama administration proposed a multi-year $1.7 billion increase in funding for the Health Care Fraud and Abuse Control Program. What kind of ROI might we expect from that investment?

It is estimated that 3 percent of America's health-care spending is consumed by fraud each year. In 2008, approximately $68 billion was lost to fraud. $60 billion of the fraud losses involved Medicare and Medicaid.

The Coalition Against Insurance Fraud estimates that every $2 million invested in fighting health-care fraud returns $17.3 million in recoveries.

Accordingly, the proposed investment could yield $14.7 billion in fraud recovery, representing a 7.65 percent return on investment.

The Health Care Fraud and Abuse Control Program is a reasonable short-term investment, if the increased budget is used effectively. Over the long term, rooting out fraud and abuse will pay dividends in a more efficient health-care system.

Will the government keep the $14.7 billion as part of cost-cutting measures or will America's citizens reap the savings to preserve and restore their health? Only time will tell.

—Tom DeSanto