Billions lost in health care fraud and waste

Insurers pay for unnecessary procedures and tests, doctors prescribing brand name drugs, and patients’ identity fraud.

DUBAI // Billions of dirhams a year are being wasted on unnecessary medical tests and procedures, prescriptions for expensive medicine and patient fraud – all paid for by health insurers.

Experts estimate that as much as US$1 billion, or Dh3.67bn, is being lost to factors including identity fraud by patients and a culture of over-prescribing by doctors, who are given financial incentives to prescribe brand-name drugs.

Mark Adams, chief executive of the hospital services company Anglo Arabian Healthcare, said the health system must evolve to tackle the problem.

“Absolutely, there are unnecessary claims and unprofessional action taken by doctors and some insurers,” Mr Adams said.

“It is something the regulators and providers need to work together to stamp out.

“Common behaviour in the UAE is doctors splitting fees so they get about 30 per cent of diagnostic fees.”

While there is nothing wrong with referring patients for extra checks, Mr Adams said doctors in a paid-for health system such as the UK’s National Health Service would not do it to the same extent.

“In a cautious environment the doctor has done nothing wrong,” he said. “But 99 per cent of these cases are ailments that will go away. There is a problem driving high levels of productivity with doctors if they are on a fixed salary.

“If they are on an incentive scheme there is a danger of overprescribing and unnecessary treatment.”

Another major issue is the use of branded drugs that can cost 50 per cent more than generic alternatives, which are generally as effective.

Most UAE doctors prescribe branded drugs.

Dr Aref Chehal, a consultant medical oncologist at Mafraq Hospital in Abu Dhabi, said the government hospital rarely used generic pharmaceuticals.

“In my 13 years here all of the drugs I have experience with are branded, which are more expensive,” Dr Chehal said.

“Generic medicine is often the same formula but a carrier effect in the drug may be different. This is what brings the cost of the drugs down.

“Branded drugs can be absorbed at a faster rate so they are sometimes more effective.

“We cannot guarantee that generic drugs will respond in the same way, so often doctors prefer to use the brand they are comfortable with.”

In a bid to tackle the problem, insurers sometimes employ “mystery shoppers” to see if doctors are encouraging unnecessary treatment. Fines can be imposed if insurers believe they have paid out unnecessarily.

Doctors who regularly overprescribe risk being blacklisted by insurance companies. Identity fraud, often involving lower-paid workers using an insurance card belonging to a friend to obtain medication, is also common.

Sometimes the medicine is returned in exchange for a credit note that is then used to buy other items from the pharmacy. If caught, these cases rarely become a criminal matter but employees are usually dismissed.

Although rare, worst-case scenarios involve patients being sent for unnecessary operation to help doctors boost their profits, insurers claim. These can sometimes put the patient at risk of further injury or harm recovery.

Offending clinics are rarely shut down. More close because of a safety breach than fraud.

Stephen MacLaren, head of sales and employee benefits at insurer Al Futtaim Willis, said the health sector in the UAE had “a lot of points of vulnerability”.

“Medical practitioners and patients often take liberties that range on the crime scale,” Mr MacLaren said. “A recent study from a US consultancy found that an astonishing one third of Emirati participants had been ‘advised’ by medical practitioners to undergo unnecessary tests or procedures to help beef up bills.

“Needless to say, unnecessary treatment or testing has the potential to put someone at risk – and sometimes very serious risk.”