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Fraud and abuse – the inconvenient truth

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Things tend to go wrong if left alone. One of the most popular Murphy’s law states that Anything that can go wrong, will go wrong. To me it’s a loosely coupled adaptation of second law of thermodynamics; entropy – the measure of “disorder” always increases with time. We have always seen a glass falling down and shattered to pieces, but we never observe pieces of glasses come together to form a glass (shattered glass is a thing that went wrong, as per Murphy J). The traditional wisdom of fraud triangle: Opportunity, pressure and rationalization, may be a plausible explanation for human psychology, but I believe willingness to commit fraud is something very inherent in nature, defined by arrow of time. Fraud is a condition that is a pale shadow of what was once an inherently functional, ordered, productive scheme.

Well-arranged bookshelf is highly unstable, a small push of disturbance would suffice to disrupt the orderliness and scattered books represent more stable state (how much more you can disturb the already disheveled system!). As kids we are very active, less stable but as we grew old we became more stable. Similarly, for humans, being morally righteous, genuine and compassionate is very difficult task – one has to fight against arrow of time – one needs to keep one’s thoughts structured and don’t let one’s mind wander, one needs energy to maintain this state of uprightness, one will feel lot of instability and tendency to yield to greed and short cuts to attain success to quickly attain a stable state. So it is quiet natural that people get motivated to commit fraud and things tend to go wrong!

So should we do nothing, just because things going wrong is a very natural process? It is not just about money or materialistic damage; it is about lives being lost [Reference: Biggest healthcare frauds in 2016: Running list – Diagnostics company owner convicted in $7.5 million fraud that resulted in two patient deaths]. To fight against fraudsters is not a choice but a necessity for the mankind. So to fight a battle against fraudsters, knowledge worker would capitalize on law of increasing returns – migrating from less information to more & more relevant insight! (which is in-line with arrow of time and quite natural!)

Economics of knowledge worker industry: Power of information

Law of diminishing returns is pervasive and touches upon every aspect of life. You enter into a restaurant with an empty stomach and food you order first and consume will provide you the best possible gratification and value for money. The subsequent orders will become less significant, providing lesser gratification, will be less valued and returns will go on diminishing. This is applicable to majority of industries and life itself – an exception is “Knowledge worker” industry, where law of increasing returns operates instead of popular law of diminishing returns.  Law of increasing returns was initially developed to explain high-tech and knowledge based industries wherein information offers a world in which the physical constraints of traditional industries have no relevance. A company that relies on its information environment (as opposed to traditional physical one – as that of manufacturing industry) is more adaptable, and it is highly probable that industry will experience increasing returns. The virtual world of information is not subject to limitations of its physical equivalent. Unlike conventional raw materials – metals, minerals and chemicals – one cannot run out of information. Information increases exponentially as you create it, every time you add a new source of information and link it to existing source you are creating an innumerable new bits of information!

Digital Harbor: Enabling knowledge worker by capitalizing on law of increasing returns

Digital Harbor has been the pioneer in preventive solutions to avoid fraudsters being entering into the healthcare system. This is where we strive to increase information sources so that we earn increasing returns on increasing information. By analyzing links among various providers and third parties we try to hinder the supply of motivated offenders into the network. We have gathered substantial amount of authentic data from various sources to derive intelligent decision points. We exploit ‘law of increasing returns’ – our dominant position as a leading anti-fraud solution provider is defended and strengthened by the company’s deep understanding of how best to make use of the information content related to providers, healthcare system and market. There is a positive feedback loop operating beneath the fraud prevention and detection product, which helps to locate more and more relevant information to counter the clever moves of fraudsters. As Murphy rightly said things will go wrong naturally, but knowledge worker industry is well equipped with power of information to fight back and restore the order, and Digital Harbor’s endeavor is to harness this power of information to empower the knowledge worker!

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