New competition for TJC: DNV Healthcare granted deeming authority from CMS

How a competitive accreditation marketplace could affect health care

Is it the end of an era for The Joint Commission? Following on the heels of Congress' move to require the organization to reapply for deeming authority for the first time, DNV Healthcare on Sept. 26 was granted deeming authority from the Centers for Medicare & Medicaid Services (CMS). It is the first organization to gain deeming authority in more than 30 years. Just how big is this news, and how much will it affect health care, hospitals, and you?

"It's a big issue. We haven't had an alternative to The Joint Commission and the American Osteopathic Association in my lifetime," says Sue Dill Calloway, RN, MSN, JD, director of hospital patient safety at OHIC Insurance Co./The Doctors Company in Columbus, OH.

As far as bringing competition to a market that has seen one major player, Nancy Foster, vice president for quality and patient safety for the American Hospital Association, says: "At the AHA we recognize that having a choice of accrediting organizations could be good for patients and for hospitals. Both The Joint Commission and DNV Healthcare will work with hospitals to reach their goal of quality improvement — they'll just take different paths to get there. We look forward to learning more about DNV Healthcare's approach and how well it works to help hospitals achieve better quality."

What is DNV?

Houston-based DNV Healthcare, a subsidiary of the Norwegian company Det Norske Veritas, first applied for deeming authority in December 2007 and learned in early March from CMS that its application was complete. CMS then had 210 days to either approve or reject DNV's application.

Of the application process, President Yehuda Dror, says, "the barriers to entry I would say are quite high, justifiably so, because you cannot come to CMS with a program that shows what you will do. You have to come in with a program that shows what you have done." You have to prove to CMS that you are "committed" and "are in it for the long haul," he says.

In the three years the company worked toward achieving deeming authority, it accredited 27 hospitals using its National Integrated Accreditation for Healthcare Organizations (NIAHO) program. Those hospitals, Dror says, are a testimony to the strength of its program as they "went through our accreditation process without gaining any favors or benefits from CMS." They also gave DNV the experience it could bank on in applying with CMS.

The ISO difference

"The major difference [between DNV and The Joint Commission] is that in our program we have taken the Conditions of Participation from CMS and we have married it to ISO 9000," Dror says.

"We like this standard," he adds, "not just from the certification point, but from the fact that is what I would call one of the better attempts to standardize common sense, as oxymoronic as it may sound."

ISO 9000 is an internationally recognized family of standards for quality management originally used in the manufacturing, aerospace, agriculture, banking, and steel industries among others.

With the rise in popularity of quality and process management systems such as Six Sigma, Lean, and others used in industries including aviation and manufacturing, how does ISO measure up? And is this the way quality and safety should be moving?

The Joint Commission has "essentially become a monopoly in the last half of the last century and it was very focused on health care," says Martin Merry, MD, CM, adjunct associate clinical professor of health management and policy at the University of New Hampshire and partner, Dynamic Health Systems. "It really was relatively slow to incorporate, in my opinion, some of the quality systems such as manufacturing."

He says many hospitals he sees across the country already have been looking for alternatives to Joint Commission accreditation, often opting instead to go through state certifying organizations, and a number of hospitals, though it previously didn't give them deemed status, have been ISO certified.

"In fact, here in my home state of New Hampshire, many hospitals have opted out of The Joint Commission. They don't even worry about The Joint Commission. They've made the judgment, whether for better or for worse, that The Joint Commission was not offering them adequate value for the expense that these surveys cost," says Merry, who serves on the advisory board of TUV, which was acquired by DNV in 2007.

In talking with hospitals that have ISO certification, he says, "they found quite great value in working with the ISO standards, and it gives them what most of them reported as a much greater depth of understanding of quality management standards than the very broad Joint Commission standards."

He acknowledges that ISO doesn't focus as broadly on health care as The Joint Commission, focusing instead on "true quality management support systems" for companies that he says are serious about quality and process improvement.

"I've often said, tongue in cheek, that The Joint Commission standards can be a mile wide but not that deep, while ISO is relatively narrow," he says.

But he sees a sea change in health care. "Health care has been kind of cloistered; it's not been a part of the real world. It has a preindustrial-based culture, and The Joint Commission classically represents that culture," he says. If he were an investor, he says he would hedge his bet with ISO, but for his clients and audiences he recommends that they compare the accreditation programs side by side and that they look "very seriously" at what ISO has to offer in terms of quality and process development.

And though he welcomes a competitive field, he sees a potential threat. "The trouble with the whole compliance industry," he says, "is that it can be gamed." People find out what surveyors are looking for and try to give them just that. Corporations such as General Motors tended to require their suppliers to get ISO certification, but it was never compulsory and appealed "to those who really wanted to do something in quality." Merry says. Now that DNV is an accrediting organization, he says, it, too, could fall into the gaming trap.

More frequent surveys

"Every two or three years, everyone scrambles around [in preparation for a Joint Commission survey]. They put everything in the corridor," Merry says.

But The Joint Commission, he adds, has been aware of that problem and has improved processes with new survey methods, tracking systems, and surprise visits.

With DNV, surveys still will be unannounced, but more frequent, and surveyors will all be cross trained in ISO methodology. "It's a shame with an audit that takes place every three years," Dror says. "It makes it a show. Our system is different. We want it to be a way of life, and in order to assure it is, we do it once a year."

He says hospitals won't need to prepare and spend overtime and hire more personnel in preparation for their audits. The method DNV uses, he says, is more about system creation and improving that system in a less prescriptive way than The Joint Commission. Hospitals' responsibility is to "meet the objectives in whichever way they do" and if there's a problem, he says, you change it.

Robert Wachter, MD, professor and associate chairman of the department of medicine at the University of California, San Francisco, doesn't think the move to DNV will be an automatic one. "At this point," he says, "the name recognition of The Joint Commission remains pretty powerful."

Peter Angood, MD, vice president and chief patient safety officer for The Joint Commission, which must reapply for deeming authority in two years, says, "We've been very successful in the marketplace and have been for over 50 years. So the fact that there is a new competitor in the hospital marketplace is fine by us.

"But we have a long-standing legacy of excellence. We've got over 80% of the hospitals accredited by us, and in sum total, we do well over 10,000 more types of health care facilities in an accreditation program. And in so many ways we are the gold star of accreditation in America."

He says The Joint Commission is evaluating DNV standards "but it looks like they're more or less focused on the CMS standards and haven't gone much beyond it."

As far as its stake in the industry, he says, The Joint Commission "will respond as a competitive organization and we expect to have success as we have for over 50 years."

However, Joint Commission and ISO certification are not necessarily exclusive of one another. Mickey Christensen, president of TQM Systems, a quality management consulting company, suggests dual certification. "I don't promote ISO 9001 [part of the ISO 9000 series] in lieu of The Joint Commission or the American Osteopathic Association or something like that because ISO 9001 doesn't have the clinical aspect The Joint Commission does.

"I think the two complement themselves very well," he says, but adds that he sees gaps in The Joint Commission standards and CMS CoPs in terms of looking at quality management systems.

"I don't want this to come out sounding negative, just stating the facts. If the IOM report ["To Err is Human: Building a Safer Health System"] is correct, and I have no way of knowing for sure whether it is or isn't, that we kill up to roughly 98,000 people a year due to medical errors, and 80% of the hospitals are accredited by The Joint Commission, then there's gaps in there somewhere," he says.

Many clients, he adds, think The Joint Commission has included things that aren't value-added and doesn't address issues related to, for example, dealing with ancillary support (i.e., housekeeping, dietary functions, maintenance, purchasing) and running an efficient business.

Exactly how it will play out remains to be seen, but Dror says he has gotten many calls since Sept. 26 about DNV's program. Dill, too, reports fielding a lot of questions about the new accrediting body from her clients.

"There's a buzz in the field. There's someone new. They want to test us out," Dror says.

"We'll see. Time will tell."