October 1, 2015

Should Britain’s National Health Service (NHS) Be Doing More to Counter Fraud?

By Richard Pike and Yulia Tosheva

As mentioned in one of our Whistleblower Insider daily updates, the accountants PKF Littlejohn got a lot of press coverage in the UK this week for a report suggesting that the NHS may be losing as much as £5.74 billion per year to fraud. Such a big number obviously provokes a reaction but what can we really conclude about fraud in the NHS and the measures taken to address it?

We need to start by looking a bit more closely at the report itself. This was not a report commissioned by the NHS but, rather, a marketing exercise for fraud loss measurement services offered by PKF Littlejohn. Further, although it did make some use of previous NHS-specific studies, a lot of the figures – including all the largest ones – depend on extrapolation from studies in other countries. The authors themselves accepted that the total loss might only be £3.73 billion (out of a budget of £110 billion in total) and, even if it were at the higher end of their range, it would only put it in line with the average for other health systems in developed countries. In short, there appears to be little to suggest that the NHS suffers any more fraud than other health systems.

It is important, though, not to be complacent. Even the lower figure of £3.73 billion is a huge amount of public money and the more so when public finances are as stretched as they are at the moment. Equally, the comparison with other health systems might not provide much comfort given that a foreword to the report notes that the World Health Organisation has cited fraud as one of the ten leading causes of inefficiency in health systems.

There are also specific reasons to question whether enough is being done to detect fraud in the NHS. The report itself makes much of the fact that there have been far fewer fraud loss measurement exercises since the author left the NHS. More broadly, there is a question mark over whether budget cuts are hampering fraud detection.

The NHS has a body, NHS Protect, that is responsible for policy and operational matters relating to the prevention, detection and investigation of fraud in the NHS. There have, however, been cuts of about 30% in its already modest budget since 2006 and its remit is not limited only to fraud.  It had to stretch a budget of approximately £11m in 2013/14 – just 0.0001% of the total NHS budget – to meet a national responsibility for tackling fraud, violence, bribery, corruption, criminal damage and theft throughout the NHS, one of the largest organisations in the world.

It is in this sort of situation that whistleblowers might be thought to be particularly important, but there are acknowledged problems with whistleblowing in the NHS. An independent review of whistleblowing in the NHS published in February 2015 found that NHS workers are deterred from speaking up when they have concerns and can face shocking consequences when they do. The review, chaired by Sir Robert Francis QC, provided independent advice and recommendations to ensure that NHS workers can raise concerns with confidence that they will not suffer detriment as a result. The UK government has accepted in principle all of Sir Robert’s recommendations but full implementation awaits further consultation.

One option Sir Robert ruled out was the provision of financial rewards for whistleblowing. It seems there was very little appetite for it amongst people he talked to in the UK. One of the concerns expressed was that people might wait for small problems to turn into bigger issues before reporting in order to maximise their chances of getting a reward. There was also a concern that financial rewards might cause resentment if some got them and not others.

It should be born in mind in this context that Sir Robert was looking at the reporting of all sorts of issues and concerns in the NHS including, particularly, accidental clinical errors. Sir Robert’s concerns arguably make sense in that sort of situation. It may be, though, that different considerations apply in the context of fraud. Fraud affecting public finances is one area where the UK government has not yet ruled out the use of financial incentives. It will be interesting to see whether it receives further consideration in relation to the NHS in the coming months and years.

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