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Experts agree that the recession exposes all types of businesses, including medical practices, to a greater risk of employee fraud and embezzlement. There are many cases of employee embezzlement that can remain undetected for long periods of time, costing practices thousands of dollars from their top and bottom lines. In this article, we explore the reasons employees embezzle, the areas in which medical practices are at risk, and ways to safeguard your practice from this threat-in good times and in bad.
Key words: Employee fraud; employee embezzlement; employee theft; safeguards.
So far, 2009 has been one of the most difficult periods in the American economy since the Great Depression. Unemployment has reached 9.5%, and that figure doesn't include individuals whose unemployment benefits have expired. There have been downturns in every sector of the economy, which have contributed to the unemployment rate and to businesses consolidating and closing.
Unfortunately bad economic times typically result in an increase in embezzlement in every type of business. Physicians and medical practices are not excluded from this threat. Some experts estimate that three out of four doctors will suffer a significant loss due to employee dishonesty at least once during their career. Embezzlers do not discriminate based upon practice size, specialty, or location. Awareness of the financial workings of your practice can greatly reduce the possibility of embezzlement.
WHY DO PEOPLE EMBEZZLE?
There are both financial and psychological reasons why people embezzle. Some of the most common reasons are:
* To support personal finances, which can be exacerbated during difficult financial times;
* Feeling a lack of appreciation from physicians (the single biggest reason for employee turnover);
* Anger toward their boss, office manager, or a coworker;
* Jealousy of a physician's earning capacity;
* Greed; and
* The sheer challenge.
Many people assume that individuals embezzle simply because they need the money. The reasons, as listed above, are far more complex. Pay attention to employees who complain constantly about financial problems. It may seem minor, but could be indicative of a more significant issue. Also, be aware of employees who appear to live outside of their means. When a $13-per-hour employee comes to work driving a $75,000 sports car, it should raise some questions. We strongly recommend that...