NEW @ THCB PRESS: Surviving Workplace Wellness. Spring 2014. Al Lewis and Vik Khanna. e-book edition. # LIGHTHOUSE Healthcare. Illuminated.

Webster’s has a new entry for mea culpa:  A voluntary payment of $500,000,000.00 to avoid prosecution.

That’s almost a rounding error for a company with a Market Cap well north of $130 billion – but the healthcare system can definitely use the money.  I remember when some of the first estimates for widespread EHR adoption were announced in 2008.  One that was hotly contested (way too high) was $150 million over 8 years.  Safe to say – we’ve got that fully funded – with change.

Google stock actually inched up (+$3.25) so it’s safe to say investors collectively yawned. Buried in their long forgotten Corporate Information pages is this one called:

Ten Things We Know To Be True

“We first wrote these ‘10 things’ several years ago.  From time to time we revisit this list to see if it still holds true.  We hope it does – and you can hold us to that. (September 2009).”

We’ll hold Google to wordsmithing this one:

6.  You can make money without doing evil.

Maybe tweak it just a tad to something like:

6.  You can print money without too much evil.

As the briefest of backgrounders, from 2003 to 2009 the GOOG basically allowed unlicensed Canadian Pharmacies to illegally advertise prescription drugs in the U.S. using Google’s Adwords program.  According to the allegations, Google actively provided support and advice to the pharmacies to help maximize those campaigns which were lucrative to both the pharmacies and – of course – Google.

For those of us that have been around for awhile – there’s nothing new here – just move along.  The U.S. healthcare system has a long history of malfeasance.  The book Coronary details the 3 year FBI investigation into Tenet Healthcare.  That investigation resulted in a $900 million global settlement in 2006.  As unbelievable as it may sound, that was actually their second bite of the big healthcare apple.  Their first was as a prior entity – called National Medical Enterprises (NME).  During the ‘80’s and ‘90’s NME was involved in massive Medicare fraud that resulted in over $979 million in settlements.  The allegations were many – including:  maintaining a corporate policy at its psychiatric facilities of paying doctors for patient referrals; imprisoning patients for insurance payments; charging insurance companies for treatment and medication that were not provided, provided at grossly inflated prices or provided when unnecessary; and milking insurance until coverage was exhausted.

In a different case, the investigation and suit against Columbia/HCA dragged on for 10 years – and ended with a fraud settlement of $1.7 billion.  While three executives were found guilty, they appealed – and won.  Chairman Richard Scott walked away with $17 million and was never charged.  The criminal settlements were made in the name of two defunct subsidiaries so that Columbia/HCA would not be excluded from Medicare funding.

In July 2010, the Medicare Fraud Strike Task Force announced its largest fraud discovery ever when charging 94 people nationwide for allegedly submitting a total of $251 million in fraudulent Medicare claims. The 94 people charged included doctors, medical assistants, and health care facility owners.  Of those, 36 have been found and arrested.  For that year, law enforcement agencies charged about 930 individuals with a conviction rate over 80%.

Earlier this year, twenty individuals, including three doctors, were charged in South Florida for their alleged participation in a fraud scheme involving $200 million in Medicare billing for mental health services.  That announcement was weeks before another takedown that charged 111 defendants in nine cities in connection with their alleged participation in schemes to bilk Medicare out of an additional $225 million.

Today, various Federal agencies are currently working on more than 2,600 health care fraud investigations.

On the release of his book Coronary in 2008 Mr. Klaidman commented:

My interest was in systemic flaws in American medicine, not criminal fraud. But the more I thought about it the more obvious it seemed to me that vulnerability to fraud was a major systemic flaw in American medicine.

I wish Google could say it wasn’t so.  Clearly it was.

Dan Munro is CEO of iPatient, Inc.

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5 Responses for “Google – Say it Ain’t So”

  1. Jonathan H says:

    Was Google bilking Medicare/the govt/individuals, or did it aid and abet those who were? The only harm I’m aware of was to US pharmacists and pharma profits, unlike in the other cases cited.

  2. Dan Munro says:

    Jonathan – abuse of the healthcare system at the expense of patients takes many shapes and forms – and the real point was Mr. Klaidman’s quote: “…vulnerability to fraud…” is itself a major systemic flaw. Many of the pharmacies were unlicensed and unregulated. Canadians themselves would probably have avoided these same pharmacies for fear of counterfeit and/or tainted drugs. The other point was Google’s professed adherence to a higher purpose or standard. That may not have been legal fraud – but it was marketing fraud.

  3. tcoyote says:

    Rick Scott walked away with a lot more than $17 million.

  4. John E says:

    How does giving the US gov’t control over private health care make sense when they have built a payer system that is vulnerable to fraud?

    Just saying….

    • Dan Munro says:

      You’re assuming it’s a binary choice/solution – and it isn’t.

      Every other country (with a formal healthcare system) starts with a foundation of universal coverage (not to be confused with single payer). The U.S. is the only country with about 50 million uninsured (and another 40 million that are underinsured).

      When you combine that with a fee-for-service mentality (with profits as the primary incentive) – you have a sickcare system – not a healthcare system.

      That has to change – not because I say it does – but because – at $3.5T per year (and 18% of GDP) it’s unsustainable. The status quo is not an option.

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