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What is economic credentialing?

Credentialing Resource Center Connection, July 2, 2004

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Dear credentialing colleagues:

Credentialing is the practice through which physicians and others apply for and gain permission to work in the hospital. Traditional medical staff credentialing has nothing to do with economics. It assesses a physician's competence and professionalism to determine whether he or she is an appropriate addition to the hospital's medical staff. Typically, traditional credentialing involves evaluating qualifications, including education, training, experience, license, and professional competence as measured through malpractice history and prior disciplinary and corrective actions.

Economic credentialing assesses (as a qualifying factor) the financial impact of accepting a physician onto a hospital's medical staff. Although the American Medical Association defines economic credentialing as an evaluation of economic factors "unrelated to quality of care," this is generally true only in the narrowest sense of the term. In a much broader sense, economic credentialing has everything to do with quality. The driving force behind economic credentialing is that it enables a hospital to obtain control over economic factors that affect the quality and range of services that a hospital can provide.

Moreover, for legal and financial reasons, economic credentialing is ultimately a concern of the governing board, not of the medical staff. Antitrust laws preclude physicians from deciding whether to admit or deny membership to their physician competitors based on economic factors. The financial "big picture" is ultimately within the realm of concern of a hospital's executive team and its board, as opposed to its medical staff. However, this is not to say that economic credentialing policies are not of concern to the medical staff, particularly where they intersect with quality and service concerns. Therefore, although the final adoption and implementation of an economic credentialing policy must be carried out by the board, the medical staff plays an important role in shaping and developing the program.

That's it for this week.

All the best,
Hugh Greeley

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