Crime and punishment. Can the NHIN reduce the cost of healthcare fraud?

In his 2004 State of the Union Address, President Bush called for the adoption of the electronic health record (EHR) to increase efficiency and improve the quality of healthcare. This system could reduce healthcare costs by 20 percent or more per year. Some of those savings would be attributed to a dramatic reduction in losses due to fraud. Though IT by itself cannot solve the problem of healthcare fraud, developing an interoperable National Health Information Network (NHIN) can provide a platform to implement real-time anti-fraud controls. In this paper we inventory the costs and benefits of fraud detection from the NHIN and conclude that such an infrastructure investment has the potential to produce significant national savings.