Prioritizing Prevention: Value-for-Money in Anti-Fraud Efforts
Jetson Leder-Luis, PhD
Jetson Leder-Luis is a leading scholar on the economics of fraud and anti-fraud policies in the US, with a focus on federal health programs. He is an assistant professor at Boston University and a faculty research fellow at the National Bureau of Economic Research (NBER). His academic research on fraud has been published in top economics journals, including the American Economic Review and the Journal of Political Economy. Jetson earned his PhD in economics from MIT in 2020, with a dissertation titled "The Economics of Fraud and Corruption."
Paper at a Glance
The U.S. loses hundreds of billions annually to fraud in public programs, yet anti-fraud policy still relies heavily on "pay and chase" enforcement and recovery. A Value-for-Money (V4M) approach offers a better standard for evaluating anti-fraud efforts by highlighting the impact and cost-effectiveness of both recovery dollars and prevention.
Key Takeaways
Preventative measures can be extremely low cost and effective at preventing fraud against public programs.
Prevention is substantially harder to measure than recovery, because instead of observing inflows, prevention leads to money not spent. These unspent dollars are real funds that government agencies should count as value produced by antifraud actions.
Data are critical for fraud prevention and measurement of V4M, but they are under-utilized. This exacerbates the undervaluation of preventative efforts.
Agency leadership should prioritize preventative antifraud measures, adopt V4M standards and invest in capacity and skills for measuring V4M of preventative activities.
Medicare would have saved an additional $4.8 Billion on ambulances if it had implemented prior authorization in 2003, at an administrative cost of only $28 Million per year.
Citation
Leder-Luis, J. (2025, March). Prioritizing prevention: Value-for-money in anti-fraud efforts. Program Integrity Alliance.
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