abdos world

Sunday, April 30, 2006



Columbia/HCA and the Medicare Fraud scandal:

This Scandal is one of the biggest Non market issues across all time beings. But before starting to talk about this huge Fraud let us start with Columbia/HCA background. HCA was the largest health care company in the world, with more than 340 hospitals under management and ownership that excludes hundreds of health care programs, surgery centers and rehabilitation centers. In 1996 alone the company brought about $20 billion in revenue which represent 36% of all Medicare reimbursement. Not only that but it had over 285000 employees.

When we talk about Fraud scandals one name directly hits the mind. Baron who in his study “market and non-market environment” clearly talks about these kind of issues “the non market issues”. There was more than one issue in this case which were. Basically that Columbia was encouraging its managers to “defraud Medicare, the federal health insurance program for the elderly and disabled”. The second issue is that they use to inflate the seriousness of patients’ illness to increase reimbursement and shifted costs to programs that were more generously compensated by Medicare. Finally Columbia has further paid commissions to doctors to refer patients to its hospital as the article suggest.

Interest in this case is mostly patients because they were the main victims, Doctors who participated in this fraud, Columbia itself which was the main target of other interest groups and institutions and finally the management of Columbia/HCA who played a major role of the Fraud. There are many Institutions that wanted to deal with this issue each in their field. There was the press (media) which played a major role in delivering the facts about this issue. Not only that but better yet they took part in the investigations. Moreover there were the governmental agencies represented by the FBI, the criminal investigative units of the Department of Health and Human Services (DHHS) , State Medicated agencies and U.S. Postal Services. These enormous amounts of institutions shows clearly how important and crucial were these issues.

The information in this case was clearly delivered by the media to the public which were going through the investigation step by step with the government. However this article does not provide much information that could be sort out here.