Managing fraud risk: A study of the private hospital sector of South Africa

Abstract

Ethical and legal decisions are made daily by healthcare professionals and personnel in the performance of their regular duties. However, fraud risk has become a threat to the sustainability of industries and organisations, including the healthcare sector. In the South African healthcare sector, losses due to fraud risk amounted to R13 billion during 2015(Bateman, 2015). The purpose of the study on which this article reports, was to assess whether private hospitals managed fraud risk effectively and in a cohesive manner. Failure to manage fraud risk threatens the sustainability of any hospital. Primary data was collected by means of a survey, which involved management staff at head office level and at hospital level. The findings suggested that South African private hospitals appreciate the significance of the management of fraud, but there is room for improvement. It is recommended that private hospitals follow a decentralised business model and decentralising risk ownership in order to manage fraud risk more effectively. Risk management training should be provided to staff members on a regular basis and a King-type regime should be adopted by private hospitals with regard to the management of risks.