Corruption as Culture and Health Care Fraud in Brooklyn

The astonishing prevalence of health care fraud in the Russian-speaking communities of Brighton Beach and Coney Island in New York City presents an interesting case study on the causes of corruption. The Brighton Beach-Coney Island area is populated by people who immigrated from one of the most corrupt countries in the world to one of the least. You can take the person out of the corrupt system, but does this remove the propensity to engage in corrupt acts from the person?

In the wake of a recent spate of health care fraud scandals in Russian-speaking New York City communities (as well as a scheme to defraud Medicaid perpetuated by dozens of Russian diplomats), the facts and some commentators suggest no. Brighton Beach has the second highest rate of Medicaid and Medicare-related malfeasance in the United States. In February 2012, federal authorities uncovered the largest no-fault insurance fraud scheme in United States history, which was operated out of Brighton Beach-based clinics. A law-enforcement official drew a direct link between “the Russian mind-set” that “if you’re not scamming the government…you’re looked upon as a patsy” and this widespread fraud. Professor Mark Galeotti expanded on this point, suggesting that “from cradle to grave” Russians have been inculcated to “bureaucratic systems that are parasitic and hostile, almost designed to make you pay bribes.”

I think “old habits die hard” as an explanation is too simplistic and uncomfortably resembles notions (discussed elsewhere on this blog) that corruption is an inherent cultural touchstone in certain societies. Furthermore, emerging evidence shows that Russians within Russia are developing a moral aversion to bribery.

An alternative explanation for the puzzle of the Brighton Beach health care fraud phenomenon is below. Under this model, culture is not the only, and perhaps not the first, link in the chain of causation.

  • First, economic incentives, rather than culture or habit, are probably the most important culprit. According to the New York State Comptroller, the health care industry employs a much greater share of the workforce in Brighton Beach and Coney Island than in any other part of New York City, and wages in the health care sector outstrip the average private sector wage in the neighborhood. Perhaps health care fraud has multiplied as a result of the same economic forces that foster the concentration of lawful immigrant small business ownership (including Eastern European immigrant business ownership in New York City) in certain sectors. The development of group networks and resources allows immigrants to more cheaply and successfully conduct business activities in sectors where other immigrants are already established.
  • Second, in some instances, organized crime groups in Russia provide individuals with seed money to carry out fraud in the United States before returning home. If such groups are responsible for the health care fraud epidemic in Russian communities, then such fraud does not reflect the culture or tendencies of these communities or of Russians more broadly.
  • Finally, the prevalence of health care fraud might be a symptom not of cultural mores imported from Russia, but of localized Brighton Beach-Coney Island mores that originated in the economic forces and isolated criminal acts described above.

In a 2010 paper, Richard Rose and William Mishler explored the question of why individual Russians living in Russia engage in corruption. Using data from the 2007 New Russian Barometer Survey, Rose and Mishler explored the correlation between several factors and the propensity of an individual to pay a bribe. They found that income, education level, social status, and age are not correlated with the propensity to bribe. As one might expect, the frequency of a person’s interaction with public services is the strongest predictor of whether a person paid a bribe. More interestingly, the second strongest predictor is awareness of other instances of corruption. When Russians learn about corruption from friends and “from what [they] see” in their local communities, they are more likely to pay a bribe than when they learn about corruption from national media.

Rose and Mishler’s analysis dispels the idea that corruption stems from a universally ingrained “Russian mind-set,” as highly localized events influence an individual’s thinking more than the national discourse. As Russian immigrants encountered the commonplace practice of health care fraud within Brighton Beach, they were more likely to participate in (whether as heath care providers or consumers), condone, or simply silently accept the corrupt health care industry.

In conclusion, we should take pause before construing health care fraud in Russian communities in the United States as another thread in the narrative of a Russian culture of corruption or, at a minimum, recognize that a culture can be bred in complex and indirect ways.

4 thoughts on “Corruption as Culture and Health Care Fraud in Brooklyn

  1. Anna — I like your alternative explanations for the prevalence of health care corruption in the Brighton Beach Russian immigrant community. There is one distinction I would like to draw, however, between claims that whole cultures are eternally corrupt (often made by the same kind of people who would claim “Russians crave a strong leader”) — what you refer to as the “cultural touchstone” theory — and the concept that “old habits die hard.” While you dismiss both as being overly simplistic, I think there is at least some validity to the latter. When individuals have spent a long time in societies where corruption is needed to get along / almost everyone is corrupt, it may be hard to disengage from that idea and get that other circumstances are less corrupt.

    One anecdote by way of example: I have a friend who conducted interviews in China for prospective Ivy League applicants. One showed up and presented him with a bag of cash. When my friend got upset, the applicant, misinterpreting it, said “Is this not enough! I can go get more!” (He was not admitted). From the student’s perspective, though, he and his family had always gotten along by bribing Chinese officials and he assumed that the appropriate thing to do was also to bribe a Western University representative, as well.

    • An intriguing idea, Sarah. I instinctively agree that learned behaviors would play a part in the decision to engage in corrupt acts, but this sits a little uncomfortably, particularly in light of your anecdote. As you noted, from the student’s perspective paying a bribe was the expected and possibly only way to get into his school of choice. If he had known doing so would be unacceptable, he would no doubt have refrained. But the rule we are then left with, from the student’s perspective, is: ‘When it makes sense to pay a bribe, pay a bribe; when it doesn’t, don’t.’ I am having a tough time drawing a clear distinction between this idea, and the ‘cultural touchstone’ argument, as both would hold that the degree to which corruption is unacceptable may depend on circumstance and culture.

      I think the ‘old habits die hard’ mentality Anna discusses is better illustrated by the idea that ‘if you’re not scamming the government…you’re looked upon as a patsy.’ To stick with your anecdote, it would be the student attempting to influence your friend, probably in a more subtle matter, knowing full well that doing so would be inappropriate. I am not sure where the line should be drawn between learned behaviors and corrupt motives (or even if, normatively, a line should be drawn at all), but clearly distinguishing these perspectives seems important in any discussion of how culture and corruption may, or may not, be connected.

  2. I agree that there are real concerns about characterizing an entire culture as being corruption-prone, but at the same time can’t help but notice that various disciplines continue to find culture does contribute to how we interact with the world (written in that way, that concept sounds incredibly simplistic, but I’m thinking of, for example, a reading from my class about trauma and refugees which pointed to studies finding that people from “individualistic” cultures and “collectivist” cultures have different ways of processing and retelling autobiographical memory–though I know there are many tangents we could go on about even that purported distinction). Is there a way to split the difference between the “cultural” argument and the “moral aversion” evidence, or rather, combine the two? Perhaps one can find an action morally repugnant and yet feel, based one one’s past experience, that it is necessary to get along in the world. “Culture” is such a freighted word that using it in the corruption context might be inappropriate (as well as distracting)–as the older post from Professor Stephenson mentions, we don’t need to think of an aversion to corruption as a western-only trait, but is there some sort of intermediate space (i.e., not a case wherein someone “knows full well” that bribes are inappropriate somewhere and offers one anyway) wherein someone can be averse to corruption and yet still have come through repetition to expect the world to work in a certain way?

  3. Anna–Very interesting post, and one that I agreed with by and large. Like Sarah and Melanie, I suspect that some habits and expectations about the appropriate way to interact with public service providers do carry-over, particularly in cohesive immigrant communities. But I think you’re right that a simple ‘cultural’ explanation falls fall short.

    In the corruption context, it’s always important to look at who is giving and who is receiving bribes. Color me unsurprised that many Russians have a moral aversion to bribery. Very few bribe-payers have any desire to pay a bribe–they’re coughing up extra because they can’t count on results otherwise. Bribe-demanders, on the other hand, typically occupy positions of power and extort others based on the power differential.

    So then the key question is, essentially, how much abuse will individuals put up with, and how does their perception of the circumstances affect their calculation?

    Here, I’m much more comfortable saying that individuals who previously have had to pay bribes to access services that were rightfully theirs are more likely to perceive the same imperative to pay after immigrating to the U.S. And I wouldn’t be surprised if those bribe-payers also morally oppose bribery.

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