Health Care Fraud and Abuse: Market Change, Social Norms, and the Trust “Reposed in the Workmen”

Abstract

Health care fraud and abuse reportedly account for 10 percent of total spending on health care, or about $120 billion per year. Not surprisingly, Congress has granted fraud control personnel sweeping powers with which to attack the problem. Unfortunately, effectively addressing health care fraud is exceedingly complicated, particularly in light of recent major changes in the medical marketplace and the social context of such conduct. Broadly speaking, physicians view such conduct as essential to ensure high-quality care; program administrators view it as the price of the program; fraud control personnel view it as criminal misconduct; and the public's view depends greatly on who is benefitting. Social norms regarding health care fraud vary among these groups as well. The article examines the practical and theoretical challenges associated with attacking health care fraud and the merits of the current fraud control regime in light of these considerations.

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