ABSTRACT
VISA International administers and operates the global network that handles VISA credit card transactions. VISA management likes to keep the rate under 0.1 percent, or ten basis points, which the credit card industry generally regards as a satisfactory level for fraud in the system; the acceptable price of doing business. The health care industry, which thinks its fraud rate might be 10 percent—a hundred times worse than the credit card industry’s—lacks any precise instrumentation on which to base its control investment decisions and makes no serious attempt to measure the problem. Industry officials point to a wide variety of activities that seem, to those officials, to accomplish systematic measurement of the fraud problem. Several interviewees pointed to industry surveys, such as those conducted by Health Insurers of America Association, as “measurement” of the fraud problem. The Internal Revenue Service recently discovered how measuring a fraud problem can completely transform the game.
