Two Approaches to Reducing Fraud, Waste and Abuse

Two Approaches to Reducing Fraud, Waste and Abuse

Our Thinking / Healthcare /

Two Approaches to Reducing Fraud, Waste and Abuse
Calendar05 September 2018

It’s been estimated that 1 in 3 healthcare dollars is wasteful—totaling upwards of $1,000,000,000,000 annually. That’s one trillion, a number so large that it is difficult to comprehend. It’s the result of a number of categories of waste: unnecessary services, inefficient care delivery, inflated prices, outright fraud, failure to deliver preventive care and excessive administrative costs.

Looking into healthcare fraud, waste and abuse (FWA) is a good way to find true savings rather than shift cost to employees. Yet only 26% of those responding to our recent webcast poll on this topic said they have an ongoing strategy to monitor and mitigate FWA, with 6% saying it will be priority for 2019. Maybe the problem is knowing where to start. For those that haven’t yet focused on this topic, there’s good news – it’s an initiative that you can implement at any time during the year.

We like to think about FWA in terms of reducing friction and increasing pressure. When we reduce friction, we make it easier for our employees to have a positive healthcare experience. We implement approaches that help them find better treatment options, avoid unnecessary treatment, and pay their bills. Increasing pressure means pushing for a better deal from the healthcare system. It includes initiatives to negotiate prices against Medicare rates and address spiraling out-of-network costs.

So if you’re looking for healthcare savings (who isn’t?), consider implementing efforts to manage FWA. First, determine your goal – reduce friction or increase pressure -- and then survey the market for solutions that offer the greatest opportunity for savings. But be aware that many of the point solutions available in the market target very specific populations with programs for infertility, cancer, or musculoskeletal problems, for example. These are all important, but they require engagement from members. Solutions that attack FWA can impact most, if not all, claims that flow through the system. That is the power that we see in these ideas.

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