The back cover of The Medical Racket (Avon Books, Inc., 1998) by Martin L. Gross provides a succinct introduction to the consequences of medical fraud in America:



Item:  Studies show that hospital-acquired infections attack more than two million patients a year—up to 80,000 die

Item:  Adverse drug reactions and prescription mistakes of every kind kill at least 50,000 or more people a year.


Item:  Federal studies show that four out of five doctors did not give the most important diagnostic test to their diabetic patients.


Item:  One HMO patient suffering from prostate cancer was told to undergo castration to save the insurance company the cost of his drug treatment.


These few examples show how the medical profession is injuring patients—while piling up billions in profit for insurance companies and some doctors and hospitals.

                        $100 BILLION A YEAR IN MEDICAL FRAUD

Item:  Just one New York doctor billed Medicaid for $13 million for patients he never treated.


Item:  The U.S. Attorney’s office in Massachusetts reveals that 83 hospitals in that state have filed false Medicare claims. Nationwide, more than 1,000 hospitals have done the same.


Item:  Many doctors regularly “upcode” their reports to Washington and insurers, stealing billions and almost doubling their incomes.


Item:  HMOs show doctors how they can earn big bonuses by cutting back on patient care, including not making needed referrals to specialists.


      Medical fraud siphons off vast amounts of money that should be devoted to patient care.  The private system of healthcare insurance is perhaps the biggest fraud of all since it devotes over 30% of the healthcare dollar to paying administrative costs for the insurance companies. Insurance companies and all other “winners” in the medical bonanza, devote a considerable amount of money on politicians who support and perpetuate this corrupt and dangerous system.

                                                       By What Right?
A review of the 36 cases of alleged financial fraud shows frequent violations of Federal PATH regulations. So-called errors committed by unsupervised physician trainees are a major source of patient harm and death (see Libby Zion and Seth Speken, for example).  The Government, through Medicare, pays teaching hospitals 8 billion dollars annually to provide salaries and supervision for their students. A PATH violation means that a patient had been treated by an unsupervised trainee, and most likely without their knowledge or consent.
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