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NHS Fraud – Why Does It Happen and How Do We Stop It?

Portsmouth University undertook a study in 2016. The outcome of the study stated that the estimated cost of Fraud and Error within the NHS could be anywhere between £5.7 and £8 BILLION per year. Which sounds completely unrealistic at first glance, but when you work out that if each of the 315 thousand nurses within the NHS simply adds 30 minutes to their timesheet every day that equates to around £735 million a year – add that in with the estimated £237million in false claims for free prescriptions/dental work then that initial figure seems a lot less ridiculous.

It is my job to teach people that Fraud can (and will) occur in any organisation – including the NHS.

One question I am asked repeatedly is “why do people commit fraud?”, Almost every day I am told “I could NEVER commit fraud”. So what is it that drives honest, hardworking people into committing fraud?

American criminologist Donald Cressey developed a theory – widely known as the Fraud Triangle.
The fraud triangle is made up of three factors intending to explain how and why fraud occurs:

  1. Most individuals have to be under some form of pressure to commit a criminal act. This pressure does not need to necessarily make sense to outside observers, but it does need to be present. There are many pressures that could push someone into committing fraud, these could include; money problems, debts, alcohol or drug addiction, gambling addiction. Greed can also become a pressure, but in this case there is usually a second factor for example a sense of injustice “The company has not been paying me what I am really worth,” “I always get to work early”, “Technically I am only taking what I am owed” for instance.
  2. Opportunity. An opportunity to commit the act must be present. In the case of fraud, usually a situation arises where there is a chance to commit the act without a high chance of being caught. Often an individual will “try their luck” with a smaller crime and if this goes unnoticed will continue to commit fraud over a period of time. Organisations that are not actively working to prevent fraud can present repeated opportunities to individuals who meet all three criteria of the fraud triangle. Lack of robust policies and procedures could be the only opportunity required for fraud to occur.

  3. The mindset of a person about to commit an unethical act is one of rationalisation. Most people do not commit Fraud with the mindset that what they are doing is wrong. The individual manages to justify what he or she is about to do. Some may think they are simply taking what they are owed, or borrowing funds that they will ‘pay back’, or that they need the money more than the “organisation they are taking it from.

Almost universally, all three elements of the triangle must exist for an individual to act unethically. If we can focus on preventing each factor, we can avoid creating fertile ground for bad behaviour.

Hopefully you are wondering how we do this….

  1. Relieve Pressure. I know that we as an organisation cannot completely alleviate the pressures in people’s home lives and a lot of the time we are not aware of them (especially when it comes to Patient/Contractor fraud); However it is important that we seek to identify any possible pressures that our organisation could have an impact on – such as money problems, substance abuse, etc. working to relieve these issues can help prevent criminal behaviour.
  2. Minimise Opportunity. Our organisations should always be looking to minimise the opportunity for fraud and unethical behaviour. This is the main part of the triangle that we can have the biggest impact on. Speak to your Local Counter Fraud Specialist or Audit Manager and make sure that the policies and procedures you follow are watertight. Review internal controls and address any current or future vulnerability. It is worthwhile to have your LCFS look over any new protocols to check whether Fraud could occur and also to ensure that if a fraud was to occur the policy allows for appropriate sanctions and redress.
  3. Target Rationalisation. One way to prevent fraud is to keep individuals from ever being able to rationalise the behaviour in the first place. It is vital that we create a “zero tolerance” policy towards fraudulent behaviour, and remind employees of this policy on a regular basis. The Anti-Crime team work towards creating an anti-crime culture within our organisation. Employees should be reminded that NHS Fraud impacts on all of us. An effective way of communicating this to employees is to ask them to look at the bigger picture – if they are okay with committing a ‘small’ fraud then perhaps other people are too, they are collectively putting the NHS at risk by taking monies that are not owed to them. By encouraging employees to speak with management around the issues of feeling ‘underpaid’ or ‘owed’ monies this gives less allowances for these factors to be a cause of the rationalisation process.

It is highly unlikely that we will ever completely eradicate fraud in the NHS (if we did we could clear the whole deficit twice!) - With these steps, and the help of your Local Counter Fraud Specialist, it is possible to significantly reduce the cost of Fraud; which ultimately results in better patient care!