Waste in healthcare is a significant issue, with an estimated 25 percent of US spending being wasted. Interventions to decrease low-value care and poor outcomes could save about 25 of those wasted dollars. Additionally, $58.5 billion to $83.9 billion is wasted by fraud and abuse, and $27.2 billion to $78.2 billion is wasted due to failure to properly coordinate care.
Advertising is a good way to keep patients informed about various services, but hospitals’ main marketing objective is typically to woo them with ads that highlight them directly. Hospital marketing budgets are rising as hospitals need to increase volume to make up for lost revenue in the new value-based care model. The recession in 2008 forced budget cuts at many hospitals, and advertising was generally prohibited in medical practice until a 1975 Supreme Court decision known as Goldfarb. This practice prevents most consumers from learning which services a hospital performs poorly.
Waste in healthcare means lower margins and lost revenue opportunities for hospitals. Healthcare facilities that invest more in advertising tend to be “better” hospitals, offering higher caliber care and services. Hospitals are constrained by the land surrounding them and don’t want to put together a portfolio of real estates, adding that owners are looking to reduce their administrative burden and costs.
📹 How Medicare And Medicaid Fraud Became A $100B Problem In The U.S
In an exclusive investigation, CNBC takes you inside how fraudsters are stealing Medicare and Medicaid funds through a wide …
Who profits the most in healthcare industry?
Big health began as a series of oligopolies, with four private health insurers accounting for 50 of all enrolments. UnitedHealth Group, the largest, made $324bn in revenues last year, and its market capitalization has doubled to $486bn. Four pharmacy giants generate 60 of America’s drug-dispensing revenues, with CVS Health accounting for a quarter of all pharmacy sales. Only three pharmacy benefit managers handle 80 of all prescription claims, and 92 of all drugs flow through three wholesalers.
With limited room for growth in their core businesses, these oligopolies have been expanding into other parts of the healthcare supply chain. The Affordable Care Act of 2010 limited health insurers’ profits to 15-20% of collected premiums, but it imposed no restrictions on physicians’ earnings. This strategy channels revenue from the profit-capped insurance business to uncapped subsidiaries, potentially allowing insurers to retain more of the premiums paid by patients.
From 2013 to 2023, the nine health-care giants spent around $325bn on over 130 mergers and acquisitions, some of which pushed the firms deeper into each other’s turf. In 2017, CVS offered $78bn for Aetna, a competitor to UnitedHealth, while Cigna swallowed Express Scripts for $67bn. In 2022, UnitedHealth paid $13bn for Change Healthcare, a data-analytics firm that processes insurance claims for large parts of the industry.
What generates most money for a hospital?
A recent survey by physician staffing firm Merritt Hawkins reveals that the revenue generated by physician specialties for hospitals is typically higher than their annual salaries. The survey, which was sent to 3, 000 hospital CFOs and other financial managers between October 2018 and December 2018, included data on 93 hospitals. The average annual revenue generated by all physician specialties for their affiliated hospitals has remained relatively constant over the 16 years the survey has been conducted.
The survey results are generally reliable and accurate, as the overall number for average annual revenue generated by all physician specialties for their affiliated hospitals has remained relatively constant.
What makes the most money for hospitals?
A recent survey by physician staffing firm Merritt Hawkins reveals that the revenue generated by physician specialties for hospitals is typically higher than their annual salaries. The survey, which was sent to 3, 000 hospital CFOs and other financial managers between October 2018 and December 2018, included data on 93 hospitals. The average annual revenue generated by all physician specialties for their affiliated hospitals has remained relatively constant over the 16 years the survey has been conducted.
The survey results are generally reliable and accurate, as the overall number for average annual revenue generated by all physician specialties for their affiliated hospitals has remained relatively constant.
What do hospitals spend the most money on?
Hospital operating expenses include construction, renovation, food service, salaries, medical equipment, medical supplies, patient medications, and software and IT solutions. Recent financial trends show decreasing revenues and increasing expenses across U. S. facilities due to factors like supply chain disruptions and shifts in care settings. Healthcare Insight uses Definitive Healthcare HospitalView product data to understand these biggest expenses, sourced from the Medicare Cost Report and aggregating from the most recent 12-month interval.
Why is so much money spent on advertising?
Advertising is an indispensable tool for enhancing brand awareness, disseminating information, and attracting new customers.
What causes a hospital to lose money?
Small rural hospitals face significant financial losses due to varying factors across the country. In some states, low private insurance payments are the primary cause, while in others, low Medicaid payments and low insurance coverage rates are the largest single cause. State grants or local taxes may help reduce or eliminate losses in some states, but little or no assistance is provided in other states. To eliminate losses, changes in payments from all payers, including Medicare, Medicaid, and private insurance plans, are needed.
The relative magnitude of contributions varies between states and hospitals, making multi-payer solutions necessary. Most rural hospitals closed due to financial constraints, with a median loss of 9 in the year prior to closure and almost one-fourth having losses of 20 or more. In contrast, most rural hospitals that had not closed by 2023 had small but positive total margins.
Why do hospitals spend money on advertising?
Hospital advertising in the US was initially discouraged until the early 1980s, when policymakers began to embrace it as part of a strategy to inform consumers about the differences in quality across healthcare facilities. The hope was that higher-quality hospitals would use advertising to market their superior performance, increase demand for high-quality facilities, and incentivize all hospitals to invest in quality improvement.
However, policy observers have raised concerns that advertising may increase demand for all hospitals, not just high-quality facilities, due to the difficulty consumers have in judging the quality claims made by hospitals. Limited regulation also means that advertisements may be designed to mislead consumers.
To understand whether high-quality hospitals are responsible for most of the DTC hospital advertising, a cross-sectional study was conducted using data from a market research firm. The study analyzed annual spending on advertising by general acute care hospitals operating in the US from January 2008 to December 2016, and assessed the association between hospital advertising and concurrent measures of hospital performance. The study was deemed exempt by the Yale University institutional review board because it only included the analysis of secondary data.
How much money do hospitals spend on marketing?
In 2023, the US hospital industry spent around 6. 2 million dollars on advertising, a decrease from the previous year’s 6. 3 million dollars. The figures were calculated using data from government filings and financial records, with single industry values based on data from participating companies. A cross-sectional time series analysis was used to pool historical data values for all companies within each industry, and a non-linear multivariate model was derived for the entire industry.
The ad-to-sales ratio is a weighted average ratio for the industry, based on the sales of each company. A “0” value indicates expenditures less than $1, 000 per year. The source did not provide missing values due to lack of reporting from participating companies in the given industry.
Why are hospitals not doing well?
Hospitals in California have faced financial difficulties due to high costs and inflation. Last year, they paid at least $10 billion more for labor, supplies, and other expenses than the previous year. However, they also reported smaller investment gains, with nearly $119 million in non-operating revenue compared to $6 billion the previous year. The industry reports that 200 hospitals had negative operating margins last year, while 160 hospitals reported losing money in their operating budgets even before the pandemic. Credit ratings agencies have recently upgraded the bonds of several hospitals and health systems.
Why are hospital systems losing money?
Hospitals and health systems are facing significant challenges in maintaining access to care, particularly among those in severe financial distress. The average age of capital investments for medical equipment and infrastructure has increased by 7. 1 for all hospitals in 2023, leading to bond rating agencies issuing rating downgrades and making it harder for some hospitals to borrow money. Ongoing reimbursement challenges, worsened by crises like the recent Change Healthcare cyberattack, and increased operating costs create an unsustainable financial environment.
Additional threats include ongoing Medicaid redeterminations increasing uncompensated care, regulatory changes adding operational burden, cyberattacks threatening healthcare infrastructure, and potential legislation cutting Medicare payments to hospitals. Hospitals often play a critical role in providing essential health care services, such as emergency care and behavioral health, which are necessary for the health and well-being of communities they serve.
In 2022, hospitals admitted nearly 137 million patients in emergency departments and delivered over 3. 5 million babies. Many of these essential services are extremely resource-intensive and costly to offer, compounded by demographic trends like an aging population and clinical factors like higher patient acuity.
Public payer payments for these services fall well below costs, with underpayments from Medicare and Medicaid totaling nearly $130 billion in 2022. Medicare paid just 82 cents for every dollar hospitals spent caring for patients, resulting in a shortfall of almost $100 billion. Cumulative underpayments in the second half of the last decade totaled more than half a trillion dollars, a nearly 40 increase compared to the first half even after adjusting for inflation.
What is the hospital’s biggest expense?
Healthcare facilities face numerous expenses, including staff salaries, benefits, pensions, and post-employment costs. These costs are the largest in most facilities, including salaries, benefits, supplies, and services. Healthcare providers must consider these major expenses when making decisions about their company’s future. The second largest expense is supplies and services, followed by depreciation. Healthcare facilities must carefully manage these costs to ensure the success of their businesses.
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Around 18000 years ago, the falls didn’t exist. They were formed then ice sheet from the North Pole left behind vast areas of …
Yet I had to pay $2700 out of pocket due to high deductible insurance provided by my company when I fractured my wrist then visited ER, the Dr wrapped my wrist and gave me pain killer. I simply not qualified for Medicaid because I make”too much” money as regular blue collar worker. I didn’t wanton see Dr last week when I had sore throat and coughing my lungs out because it will cost me over a hundred out of pocket. And I have friend who is visiting nurse told me he went to see this patient who has Medicaid yet lives in penthouse in a building of Manhattan, the living room so huge that they put a grand piano in the center. How the heck people like that can get free medical and I have to avoid Dr after I pay thousands a year for medical insurance? What’s wrong of this country?
I used to work for an insurance company in the medicare supplement/medicare advantage plans division and almost all claims calls from “providers” were for dme… and a lot of times i got calls from patients who got billed for dme that they didn’t even need or got in the first place, this explains a lot.
Medicare (and Medicaid) should have current addresses, phone numbers and email adressses of Medicare and Medicaid patient/members. When a DME is ordered on the patient/members’ behalf, a letter/phone call/email should be sent to the patient to confirm the order and if not confirmed or if denied, go after the provider.
It seems quite a simple solution… to show Medicare recipients a quarterly or monthly explanation of benefits and on it, show a number or website to contact to report fraudulent charges. Incentivize their reporting. They’ll get a certain set amount for each firm that they report that turns out to be fraudulent.
I’ve worked my whole life, went to college, have a degree, was unemployed, went back to school, for a technical diploma, and had to find a job, because it wouldn’t work. Anyways, I’m on Medical Assistance, because of medical problems and inability to get medical insurance. So, now I’m forced to take part-time. I’d love to find these people, and make them really on Medical Assistance. But, it would be permanent.
Would be so easy to prevent (nearly) all of this: require photo ID and a signature from the supposed recipient of the medical treatment. Or have them login to a Medicare site (just like an IRS login). Could include 2 factor authentication with their registered number and require a licensed medical doctor’s authorization.
I went to a dentist for routine teeth cleaning. Instead of just cleaning my teeth, they wanted to do a deep cleaning, and more, to get all the $2000 Medicare Advantage is willing to pay per year. When I went to get my teeth cleaned, they drilled on four of my good teeth to put in fillings. It’s insane. It’s one thing to maximize their revenue, it’s another to ruin perfectly good teeth.
Medicare and Medicaid government workers should be held accountable for allowing for this obvious nonsense. There is no reason why invoices cannot be checked before payment with proof of services, patient confirmation, pricing audits, and revisions of services actually needed for goal of efficiency of servicea.
The state of Florida is also known for where all the old folks flock towards to live out their retirement life. These old people or their generation doesn’t know any better and most aren’t informed enough or kept up with the ever changing times. So I think most of these types of frauds is easily possible with such citizens.
We can learn from this article. To not put your stash in your house, even if underground. Everything else the government could control dont have budgets. Set certifications to operate like Towing company’s and Key locksmith do at county level. Enforce it at some level cause 100B could cover Healthcare for most Floridians.
Two things here… first, private insurance companies seem to do pretty well at controlling fraud, why cannot the government do that too? Probably again because the government doesn’t care about our money. They need to be held as accountable as the criminals. Second, When someone is caught not only should they lose everything they own from this (RICO) they also need to do the maximum prison time for it. Make them pay and pay hard. stop going easy on them.
I’m a military (disabled) veteran. At the VA, I am covered at no charge for my service-related conditions. Other medical issues, the VA charges both my Medicare & my retirement health insurance (BCBS). To the VA & other hospitals, I’m a cash cow. The VA is notorious for delaying giving you a diagnosis and insists on your coming back for a ‘condition’ every 3 months with no relief in sight. This happened to me at Cleveland VA, seeing top orthopedic Dr, who kept insisting that my right hip problem was “just bursitis”, but “come back in 3 months”. Then I couldn’t walk. My R hip joint was not only bone-to-bone, but burrs on the joint. I needed an immediate hip replacement which I had done at a civilian hospital. A simple xray by the VA orthopedic dr would have easily seen the problem years earlier. Was recovering from a sternectomy several yrs later, and they insisted on putting me in a nursing home for 6 weeks “because I had good insurance” just to change bandages. I argued for over an hour and refused to go to a nursing home, went to my home instead & took care of myself. Same thing with “big name medications” – was told I have “good insurance” so I should go on these various meds. I told them no. It’s the Doctors & institutions that are bleeding the system. If I didn’t have “good insurance”, no one would care about me. It’s disgusting.!!!
How do they get their fraudulent charges approved? I live in Florida. Every time I go to the doctor, medicare/medicaid refuses the charges and I pay out of pocket. Someone within the medicaid program is helping by approving the charges because medicare refuses all my legitimite bills. These fake bills would never be paid if they went through the same process as my medical bills.
When they partially privatized the medical care of Medicare and the system, pharmaceutical companies and other associations are thinking of taking the money without accountable repercussions, if the government would do the administration of the system and the actual workings it would be twice as productive and cheaper
It’s really getting hard for me to feel bad for Americans when this could all be easily solved if we had Medicare for All and allowed the federal government to negotiate the cost of all health services and products and also kick all the middlemen including the insurance companies out of healthcare. When are the American people gonna stop giving into this fear of socialized medicine and stop screwing themselves financially?
I think it’s excellent that these citizens have gotten away with stealing billions because the citizens shouldn’t be held any more responsible or accountable than the government and I truly feel that the media plays a slanted role because they present these stories about citizens ripping off the government but hear close to nothing about the government ripping off the government and tax payers which in comparison is much more damaging and going on much more than anything else… I know because I have had to confront government fraud being committed and covered up internally every day of my life in order to stay alive since the day I fell Ill in 2003!! And no media outlet has ever helped me by exposing the crimes, if they had the crimes would have stopped years ago but because there is no vestment in talking about it there is no possibility of ever stopping it and I have lived a degrading life to three generations, never receiving reasonable medical treatment in the state of Minnesota to date “20 Years” even when I was open on medical insurance because NO ONE IS ENFORCING THE ALREADY ESTABLISHED REGULATIONS ON EMPLOYEES AND ADMINISTRATOR OF THE PUBLIC MEDICAL PROGRAMS and so treatment is allotted and illegally prohibited the way policing handled by minneapolis (DOJ ‘23 Findings) and the same allotted blind bias that lets them violate my rights, get away with it and keep it secret then punish me for reporting it all while I have no medical treatment (because of how these people personally value my worth as someone needing help to cover medical cost) allows these crooks to steal funding (because of the personal value judgement placed on them as alleged business owners) just as easily as it was to withhold funding I was supposed to have from me… why because the internal government is NOT operating the program to regulation and when reported (because I cannot be the only one) the only responses are to create narratives and excuses the pardon and conceal damaging government behavior and/or retaliate against the reporters.
The root cause of the high Medicare and Medicaid is very simple: there is no cost control. There are no limits the amount of money the doctors, the hospital can charged. You should watch the article of a man lining in Plattsburg, NY. He was diagnosed with an abdominal hernia. He shopped around to find the various options for the surgical procedure. He received quote from $3000 to $30,000 for the same procedure! Charging an extra $27,000 for a surgical procedure can this characterized as a fraud ???
Here’s a true personal account of ‘mass health’ I wreck my hip AT WORK…fired for refusal to do my job, forced to get mass health and for the next 8 YEARS my treatment has consistently been x ray/mri then physical therapy (even tho NO PROGRESS MADE…6 times over) I then have a hip surgery (which left me worse off than I was before and surgeon says this: “guess it’s not a hip problem” orthopedics says “sucks to be you just suffer” skip 2 years and pain management wants an mri (I have a metal implant in my right side) Now they send me a $1600 bill for said mri. (And the specialist says NOTHING CAN BE DONE FOR MY PAIN) Or the time I went to the ER for coughing up blood…was there for 11.5 hours in the waiting room, another 2 hours in a room and then another 3 hours to be told I have pneumonia. (“Primary care physician” i had at the time blamed it on smoking and did NOTHING)
My doc, in the first visit, did blood work. Failed to a) tell me I was having ( basic( blood work and b) what it was for . FYI: This is a violation of Patient’s Rights Anyone touching you, taking fluids etc. You are to be informed of why and what ! I received a bill for $ 2,030! ( I pay $10). I was hounded every week & despite asking for results ( copy, which took 4 months to get !) And being told I was low on values NO ONE CARED to follow up!! This is throughUniversiry Hospital I Denver/ Aurora . They are billing for work done without the patient knowing why. They refuse legitimate short term use pain meds, And my NP ? I’m 75 dropped something and she stands there to watch me suffer. Nit saying ” let me help ” There is no compassion, caring or real concern. But then they weren’t taught to feel or that they have to. Gen Sterile – ” I want to work in medicine as long as my decision isn’t challenged ; And patients? Ew I have to touch them and listen to their incessant whining “.
See this is why I don’t agree when people complain that Amazon is moving into healthcare.The US should hire Amazon to manage Medicare and Medicaid. They’d make fraud a lot harder, there’s so much they could do to improve operations efficiency and with AI technology to do these boring repetitive tasks, auditing could also be improved and expanded.
the DME business is difficult because …you get someone a wheelchair it last a while…where’s your next customer ..however a service based -model like kids-therapy or DR.’s office …you keep the same patient (customer) …be smart and open your business w/ integrity !, keep 2 sets of records (1 ready to go for an audit)…and dont bill for what you dont provide …it’s that easy
And to think, we could have just nationalized healthcare and prevented all of this. But no, we did the “Massively inefficient means tested program + for profit healthcare”. Taxpayers are on the hook for their own healthcare & funding the administration of this program, paying the benefits, and making up the losses for a program they get no benefit from Are we ready for universal healthcare yet?
Ok… I don’t get it. In my country, you don’t get a medicine or a medical device without a doctor prescribing it. All of the prescriptions get put in your medical records. Nobody just gives you something and then sends the bill to the government, and the government doesn’t pay a bill for something a doctor hasn’t prescribed. How is this possible? I mean, I’ve heard of scammers sending legit looking bills to people and companies in the hope a small percent of them will pay it, but shouldn’t the government be better at checking such things?
im35 im very confused how i always have Free Medicaid Healthcare cuz im mental retardation Lil but i choose not to have it anymore cuz i don’t care about my Health lifespan ii heard some people have to pay over 6oo bucks once a year in fine well i never fired my tax before cuz High School never taught me how ???
Yes, Medicare out sources it’s claims should have an over site committee. I feel the staff should be better train to catch these thieves instead of going after seniors for 68.98 mistake that these contractors make. If they can make small mistakes yes, they can make mistakes like in the billions. also, why don’t you get to the bottom as to how these claims are being processed? I know first hand these claims adjuster do make a mistake and they made two mistakes with my 2 claims. They paid it to me and now asking me to give it back? Find better contractors with well knowledgeable accounting staff that will catch mistakes. Especially if that many dollars worth of claims are coming in, alert/alarm bell should be ringing! Medicare covers the vaccines that I got reimbursed for and I am not paying back. Something definitely wrong in those offices that processed the claims. Of course the thieves will try but the office should have double set of eyes to prevent such large sums going out the door. Good luck Medicare, the cure for this begins in your offices.
The government needs to fix this and several other problems that are reasons we are even questioning the fate of Medicare and Social Security! The lack of oversight and controls got us into this mess, so quit fighting about who should be in charge and fix it — Reps & Dems together! Ridiculous. Then do it with unemployment and all the other state run projects.
Gang member female used two different IDs to collect welfare. I reported her she retaliated and got paid to get me fired from my job that I was struggling to work due to suffering medical problems and disabilities, life threatening issues that I was struggling to get medical care for. I needed that job to pay for excessive cost of prescription medications and medical care. I was lied to telling me that the doctor was there but only nurses I did not get the care that I needed, however that office was allowed to get paid from Medicare. I called Medicare and they said it would be hard to correct because I signed in at the desk. If you don’t have quality safe insurance it was very hard to get medical are to keep you from suffering and saving your life in Southern CA.
I am thankful they are catching these criminals but what about the person who really needs this equipment… How does someone scrutinize a member of my family that had a progressive disease and that they were going to need all of the comforts to help them on a daily basis.. a toilet, a bathtub chair a recliner motorized chair you find out later you have to pay for the motor because it doesn’t come with the chair.. sold separately 😫… Too bad if the 1st chair starts to age out and you need another one because your body is still deteriorating and you lost weight but guess what you can’t get another one unless you pay for it out of your pocket I think it was for at least 10 years for Medicaid or Medicare will pay for another one 😭… A cane and a Walker.. most of the time the prices are outrageous and then you have to get a prescription and then you have to get what you get and don’t be upset or hopefully have enough money to kind of pick and choose and get something that your loved one likes an would really keep them comfortable as their bodies a changing or are suffering… So many rules about that but the people that are getting away it is just a breeze..😡
My wife’s friend Al (old blind guy in a wheelchair) had a home care giver stealing his money and sent his information to some of these scammers, and because he does use a wheelchair already when the fraudsters tried to use his Medicare/Medicaid it tossed up all kinda red flags. The care giver got arrested and my wife t ook over his care for a few years until he passed.
Them scammers are finding more and more cleaver ways, I hope people block all numbers and text messages and emails and everything else they get on their phones that they don’t know since people’s numbers are put out there when they don’t want them to be that’s what I don’t like they still get people’s phones numbers some how these new phones can block and report scammers and other unwanted contacts I hope they use it.
This is exactly why taxes and the irs needs to go away period then there’s nothing for anybody that’s the only logical solution to this issue there is way way way to many fraud or illegal or illegitimate funds being transferred to someone by ether scam or “loop holes” because as a human race we only want more (end rant)
I have been forced into a Medicare mill in South Florida for the past 4 years. I go to see a primary doctor that if I am lucky spends 10 m minutes with me. They never listen, just push me to another place for test. I get the text. Have to wait 2 weeks to get it. Have to wait a week or more for results. Have to go back to primary doctor to review test. They barely tell me anything, but tell me to take a dangerous medicine for pain. And sends me someplace else for more test. Meanwhile I am not getting anything but a PILL and a BILL. I guess if doctors were so smart graveyards would be 90% less full. NO money to be made from healthy people and all the juicy medicare money to fund their beautiful homes and 401 K plans.
As someone who has worked in DME for the past 11 years this blows me away. There are rules and procedures for billing any insurance. I get yelled at by providers all the time because I can’t accept an order or a note that doesn’t meet the rules of said patient’s insurance. Heck patient’s scream at me when I can’t provide them something because I don’t have the correct paperwork.
in a time where online fraud is soo frequent. these fraud penalties are really lenient. the reward severely overweigh the risks when it comes to fraud. there is no difference between stealing and fraud. fraud is just a covert way of stealing yet it has lenient punishment compared to actually physically stealing. fraud is on rise especially when most companies are moving to Mobile App as a way of payment. applying for Credit cards/LOANS should be a IN PERSON thing only.
My orthodontist in Amarillo committed Medicaid fraud (Goodwin orthodontics) and I’ve been mocked my whole life because before he was arrested he couldn’t take all the brackets off so before I could get the remainder takin off he was arrested and I went to school for months with missing brackets and no wire being made fun of constantly. I’m over it now just wish it wouldn’t have happened. I need braces but I don’t trust doctors anymore.
People like such is what’s making it difficult for desperate people in need of their wound care supplies through Medicare and Medical to get approved for their coverage for overages instead wasting money on Dr visits once a month for chronic wounds that’s going to take months if not years to fully heal.
Medicare and Medicaid almost pays for nothing you have to fight to get the things you need, especially for those people who have no choice but to get Medicare or Medicaid, especially in small towns where a lot of places and local healthcare facilities don’t take it people have to travel distances just to find someone who does in order to get the healthcare that they need They have to jump through a lot of hoops just for a simple office visit