Patient safety and ongoing quality improvement are top priorities for hospitals—and with the onset of healthcare reform, the pressure to improve quality and reduce costs has never been greater. One way healthcare leaders can provide a safe and secure environment for their patients and employees is by implementing a comprehensive credentialing program.

Credentialing is the process of obtaining, verifying and assessing the qualifications of healthcare personnel and is a fundamental component of regulatory compliance. Credentialing standards are based on recommendations by organizations such as the Occupational Safety and Health Administration (OSHA), the Centers for Disease Control and Prevention, The Joint Commission (TJC) and other industry and professional regulatory bodies.

While tracking and managing these regulatory requirements means high administrative costs for hospitals; the cost of not credentialing is estimated to be five times as great.

Cost of Credentialing

In order to truly gauge the cost of credentialing. costs must be measured throughout the entire organization, and include people, technology and credential fulfillment. Not only does the hospital need staff from multiple departments to help with credentialing and access control, it also needs multiple information systems, including: 1) Human Resource Information System (HRIS); 2) Vendor management systems; 3) Volunteer management systems; 4) Visitor management systems; 5) Learning management systems; and 6) Immunization tracking systems. Hospitals often assume additional costs by providing annual employee immunizations, drug tests and background tests for new employees, as well as continuing education for clinical and non-clinical staff. When everything is added up, the cost to implement a credentialing program for an average sized hospital of 161 beds, is typically over $1.1 million per year in system and personnel related costs. 

Cost of Not Credentialing

However, recent analysis has revealed that the cost of not credentialing is potentially even more expensive and far reaching. Today, an estimated 3.4 million adverse events occur in hospitals annually, affecting nearly one out of 10 patients. These events can result in prolonged hospital stays, disability or even death. However, with the proper environmental controls, clinical training and maintaining a culture of vigilance, the majority of these events can be prevented.

Hospital acquired infections (HAls) account for 50 percent of adverse events. The average direct cost of HAls is $4.4 million for an average-sized hospital of 161 beds. The other 50 percent of adverse events include falls and violent crimes as well as drug-related, diagnostic and therapeutic incidents. The average direct cost of the adverse events (outside of HAIs) is estimated at a yearly total cost of $740,600 for an average-sized hospital.

In addition, theft of equipment and supplies cost an average-sized hospital $644,000 per year. Controlling access to hospital supplies through criminal background checks and drug tests is critical in reducing these costs.

There are also a number of indirect costs to not credentialing. For example, if hospitals do not require employees to receive the flu vaccine, they often experience excess absenteeism and disruption of healthcare services during flu season. A survey of 221 U.S. healthcare institutions reported 35 percent of hospitals face staff shortages, costing an estimated $133,000 per hospital annually in healthcare worker sick leave during flu season.

Intellicentrics Cost of Not Credentialing

In addition, preventable adverse events can lead to higher litigation costs. According to the American Hospital Association, total medical expenditures for the 5,724 registered hospitals in 2011 were $773.5 billion or an average of $135.1 million per hospital. This indicates that each hospital spends between $2.7 million to $13.5 million on malpractice litigation.

The Benefits of a Comprehensive Credentialing Program

Successfully executed, a comprehensive credentialing program can help improve clinical quality, reduce unnecessary expenses and help hospitals build a reputation for safety and quality of care. It also enables a common set of expectations, training and accountability across the entire population of the healthcare facility. It is measurable and supports continuous improvement. And with the sponsorship of hospital administration, a credentialing program helps define a culture of vigilance, safety and quality over the long term.

IntelliCentrics, the provider of Reptrax™, simplifies the world of regulatory compliance by providing resources and tools to help hospitals make their facilities safer. 

Publication Date: Thursday, April 03, 2014