Accreditation: Weighing its costs and benefits

Factor in market conditions, long-term strategies

Reimbursement is shrinking while competition, the cost of doing business, and operating requirements are increasing. These opposing and equally significant dynamics are causing private duty providers to take a hard look at every aspect of their business, especially accreditation.

After weighing its cost and use of organizational resources against its perceived benefit, many question its value. Others have come up with an entirely different answer. Where providers fall on the value-of-accreditation scale has much to do with the market they operate in, the services they provide, and their beliefs about the purpose of the process and the importance consumers place on external validations of quality.

The three major home care accrediting bodies have slightly different standards and credentialing procedures. The Accreditation Commission for Home Care (ACHC), Community Health Accreditation Program (CHAP) and Joint Commission on Accreditation of Healthcare Organizations (JCAHO) all conduct triennial on-site surveys. They all combine reviews of policies and procedures and employee and patient records with staff and client interviews and observation of patient care to establish providers’ quality and accreditation status. (See related story, p. 72.) Each also evaluates providers’ performance improvement (PI) initiatives. However their paths diverge when it comes to establishing external comparisons of PI-related outcomes data.

ACHC and CHAP expect providers to band with others interested in measuring the same factors. They provide assistance in finding external comparison sources, but do not mandate any particular system or process. JCAHO, on the other hand, will require participation in its ORYX outcomes initiative as of Jan. 1, 2000. Providers must contract with a JCAHO-approved software vendor to transmit patient-specific outcomes data that are ultimately aggregated and compared with others before being transmitted to JCAHO. It is arguably this system, in the context of the Medicare Interim Payment System (IPS) and Outcome and Assess-ment Information Set (OASIS) project, that has most caused providers to question the need for accreditation. (See article on OASIS, Private Duty Homecare, May 1999, p. 49.)

JCAHO has already postponed the date it originally set for providers to begin ORYX data collection from July 1, 1999, to Jan. 1, 2000, and delayed the start of data transmission from March 31, 2000, to July 31, 2000. "We are continuing to look at what’s going on with Medicare," says Maryanne Popovich, RN, MPH, executive director of the JCAHO Home Care Accreditation Program. "We need people to know that we understand what they’re going through and that we’re responsive to their needs."

"In the long run, accreditation organizations are going to have a tough time unless they can show some economic value to their processes. They are taking resources out of a system that is overwhelmed and with all the oversight, it’s expensive and time consuming. They need to show some value," says Gene Tischer, executive director, of Tallahassee-based Associated Home Health Industries of Florida. Tischer has strongly urged JCAHO to delay implementation of the ORYX system until the IPS is revised.

Some argue that accreditation does show value — if it results in increased business. "It’s a numbers game. Accreditation comes off your bottom line. If you’re going to produce enough revenue to cover the costs of the accreditation, the systems upgrades and the increased paperwork involved, it’s worth it. But if it costs X to be accredited and it doesn’t bring in any business, then it’s not," says Kathleen Bailey, president of Private Duty Solutions, a Lancaster, PA-based consulting firm.

Even if you can’t directly tie new business to external certification, the process may still be worthwhile. "If you pay $6,000 to be accredited and you only recoup $4,000 in new contracts, then you may decide for your image in the community, it’s worth the $2,000 loss," Bailey explains.

With tight operating margins, some believe the potential of new business simply does not justify the cost of accreditation. "It costs $8,000 to $10,000 [to be accredited]. That’s hefty given that our profits are under $70,000. I can better use that $10,000 to give raises and offer health benefits to employees," explains Sandy Cerul, RN, BSN, owner of Mount Marion, NY-based private duty company My Nurse. The company does undergo triennial New York State licensure reviews.

Others believe the process pays for itself by forcing organizations to look at the way they operate. "ORYX and OASIS are a waste of time. You have to buy a piece of equipment to do it and it’s time-consuming and overwhelming. But accreditation on the whole is very worthwhile. You get hung up on the day-to-day work. Unless you’re told to review policies and procedures periodically and stay on top of administrative issues, it’s very easy to overlook it," says Ed Raiburn, president and chief executive officer of Home Health Specialists, a pediatric private duty company based in Media, PA.

Still others contend that accreditation brings value by substantiating quality to increasingly demanding and sophisticated health care purchasers. "If I’m in New York and my mother is in California and I need to arrange home care for her, I don’t have a clue if the company is good, bad, or indifferent. The Yellow Pages all look nice, but accreditation gives some sense of well-being. I don’t want just anyone off the street to come into my mother’s home," says Jerold Cohen, RN, MA, president of the New York City-based CHAP.

Not everyone agrees that credentials matter to the general public. "They don’t carry that much weight outside the medical profession now. They may mean something in the future," says Bailey.

"Consumers may follow it a little, but I don’t think they know what all those letters are," Cerul agrees. "We get customers through word-of-mouth advertising and who the caregiver is who comes to the door. I put all my aides in uniforms and that was the biggest marketing thing I could have done. It was better than JCAHO."

Whether or not consumers value accreditation, few argue that payers do. "Every single managed care application asks if you’re JCAHO-accredited and Medicare-certified," says Raiburn.

"They want to know they’re sponsoring a credible organization," Popovich explains.

In today’s cost-conscious environment, payers who once reviewed contracted providers themselves now increasingly rely on accreditation bodies to validate quality, says Tom Cesar, MPM, president of ACHC, in Raleigh, NC. "It all boils down to risk management and shifting liability," he adds.

Yet some argue that trend has gone too far. In 1995, providers in Texas successfully supported legislation that prohibits HMOs from making accreditation a contracting requirement. "I don’t know the impact it’s had," says Anita Bradberry, executive director of the Austin-based Texas Association for Home Care. "Non-accredited agencies couldn’t apply before. Now, the insurers can’t say, If you don’t have it, you’re not worth working with.’ They may consider it but it’s not a disqualifier."

Just as lack of accreditation doesn’t mean a provider is of poor quality, having it isn’t necessarily a guarantee of excellence. "Whether or not you’re accredited, it gets down to who’s running the organization and the moral and ethical values they have. You can cover up an enormous amount for accreditation. It doesn’t pick up on an aide coming in 15 minutes late and leaving 15 minutes early every day and the client not saying anything because they’re afraid to lose their support. It gets down to, Is the customer happy?’ It’s my license on the line as a nurse and that goes a long way to pick up what JCAHO wouldn’t," Cerul contends.

Day-in, day-out operating excellence may keep existing customers, but some need more evidence before trying an untested organization. A provider’s self-declaration of quality and good service may simply not be enough. "Americans say, Show me.’ I’m not sure how you can show me without some external review," says Cohen.

"Accreditation is more than saying, We hire competent people,’" Popovich explains. "It’s the complexity of the process and the combination of standards that take you from ethics to how they actually provide care that’s an accreditation."

With so many converging points of view, the question of seeking accreditation comes down to local market dynamics and each company’s strategic objectives, according to Bailey. Overlay a market assessment of what referral sources expect with your own business plans, she advises. For example, if your referral sources are hospital discharge planners and insurance case managers, and you want to expand the type of services they generate, then either dropping your existing accreditation or not pursuing it may hinder your business in the long run. On the other hand, if you are a local business, consumers are your primary referral source and you plan to keep it that way, then accreditation may be less important now.

All bets are off in the future, however. "Most providers are doing the best job possible, but a few bad apples and the press push it. It’s just a matter of time before accreditation covers all areas of hands-on care," says Cesar.


• Kathleen Bailey, President, Private Duty Solutions, 313 W. Liberty St., Suite 126, Lancaster, PA 17603. Telephone: (717) 509-4452.

• Anita Bradberry, Executive Director, Texas Association for Home Care, 3737 Executive Center, Suite 151, Austin, TX 78781. Telephone: (512) 338-9293.

• Sandy Cerul, RN, BSN, Owner, My Nurse, P.O. Box 750, 542 Glasco Turnpike, Mount Marion, NY 12456. Telephone: (914) 246-5070.

• Tom Cesar, MPM, President, Accreditation Commission for Home Care, 3325 Executive Drive, Suite 150, Raleigh, NC 27609. Telephone: (919) 872-8609.

• Jerold Cohen, RN, MA, president, Community Health Accreditation Program, 61 Broadway, New York, NY 10006. Telephone: (212) 363-5555.

• Maryanne Popovich, RN, MPH, Executive Director, Home Care Accreditation Program, Joint Commission on Accreditation of Healthcare Organizations, One Renaissance Blvd., Oakbrook Terrace, IL. 60181. Telephone: (630) 792-5742.

• Ed Raiburn, President and Chief Executive Officer, Home Health Specialists, 349 W. State St., Media, PA 19063. Telephone: (610) 566-2700.

• Gene Tischer, Executive Director, Associated Home Health Industries of Florida, 512 N. Calhoun St., Tallahassee, FL 32301. Telephone: (850) 222-8967.