The Use of Data Sharing as a Means to Reduce Health Insurance Fraud

Fraud in healthcare has massive negative repercussions on all stakeholder involved. From individual policy holders and private companies to government health care schemes and health insurance companies, the losses can be devastating and the repercussions can be widespread. Yet despite an increasing awareness of the extent of health insurance fraud (HIF), and more concentrated efforts to tackle the problem, the battle is never ending and many experts say it is currently one which is being lost. In the 2010 the World Health Organization report on Health Systems Financing identified fraud as one of the top ten leading causes of inefficiency in healthcare and recent studies have calculated that nearly 6.9%, or $487 billion per year of all healthcare expenditure is lost to fraud.

In developing countries, where public healthcare is often of poor quality and the high cost of private healthcare can place it out of reach for all but the wealthiest citizens, medical insurance can play a key role in preventing catastrophic financial loss due to unforeseen medical expenses and can help promote equity and better access to health care. The extent and impact of HIF in developing countries is poorly understood and woefully under investigated however it is assumed to be equal if not greater in severity than the rates of fraud found in wealthier countries. Kenya, for example, has been estimated to have rates of fraudulent insurance claims as high as 45% which leads to high insurance premiums and low health insurance penetration. With a weak public healthcare system and only 3% of the country's 40 million citizens benefitting from complete medical insurance coverage, it is imperative that efforts are made to reduce fraud in order to increase coverage and the ability to access healthcare.

In an effort to combat HIF, insurance companies have been forced to come up with new and innovative ways to prevent and detect it. Sharing claims data and other pertinent industry data to combat HIF is proving to be one of the most cost effective methods in use by the medical insurance industry today and collaboration between insurance companies is becoming increasingly commonplace. Yet despite the clear advantages to data sharing there are barriers which must be considered before such a project is undertaken; relevant key stakeholders should be consulted and an analysis of the benefits and barriers should be carefully studied. In a promising initial analysis of the Kenyan health insurance industry, key stakeholders highlighted the problems with the current medical insurance system and expressed strong support for the implementation of a data sharing system. With support from the community and other relevant actors, the establishment of a data sharing system among the medical insurance companies in Kenya could be a positive initial step in the fight against HIF.

[Nina Wine is the author of the study The Feasibility of a Shared Data System in the Kenyan Medical Insurance Sector as a Means to Reduce Fraud, that was initially presented as a final project for the ISGlobal-UB Master of Global Health and after that was published by ISGlobal's Policy & International Development department.]

Side Event: Fraud in the Private Sector in Kenya

On February 27, atl 11 am, Nina Wine will speak about this subject on a seminar at the Faculty of Medicine of the University of Barcelona. Acces to this lecture is free. For more information, click here.