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Data Mining Reduces Fraud, Combats Waste

FraudData mining typically provides some staggering returns on investment, especially when it comes to preventing theft, fraud, and other forms of waste. For hard numbers which back up this statement one has only to look to the ways that federal, state, and local governments plan to use data mining in the near future.

The numbers came up in this article which discusses new laws allowing Medicaid Fraud Control Units to use data mining in ways that will help them spot patterns of abuse. The article also helps to demonstrate how more people and institutions are starting to embrace the useful, helpful elements of this science.

Here’s what the Office of the Inspector General had to say about the new law. Note the expected ROI for government institutions:

“The OIG said that it expects that federal and state governments will spend a collective $12.3 million on data mining activities during the next decade, activities that it predicts will help recover $71.9 million during the same period, for a total savings of $58.9 million over 10 years.”

Data mining has long been used for loss prevention purposes in the private sector, particularly in the retail industry. Sophisticated programs can help spot employee theft as well as conditions which encourage shoplifting.

Almost every organization is vulnerable to some kind of fraud or abuse, so it pays to take these two examples to heart.

If your organization is ready to unleash the incredible power of data mining then it may be time to invest in data analysis training. Start with TMA’s free webinar, then move on to other data analytics training courses.

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