Medical Staff

JCAHO Proposes New Medical Staff Standards

Medical Staff Affairs Monthly, February 17, 2006

Dear Colleague,

It is February, the month in which Punxsutawney Phil searches for his shadow to predict the extent of winter in North America. The biggest shadow cast in health care comes from the federal government which has just passed legislation which will have tremendous impact on hospitals and doctors. A smaller, but not insignificant shadow is also cast by the Joint Commission for the Accreditation of Health Care Organizations (JCAHO). This month this prominent accrediting body has posted new proposed revisions to its medical staff standards. As with the results of Groundhog Day, it is difficult to truly predict what will be the impact of the shadows cast by the feds and the Joint. But we can speculate!

Let's start reflecting on JCAHOs latest postings by reviewing trends affecting medical staffs. Pundits have been predicting the demise of the organized hospital medical staff for decades but it has endured nevertheless. Partly this is the result of inertia - our medical staffs have been around in their current form for more than half a century and they have become an ossified foundation of hospital infrastructure. Outdated state and federal regulations prop up the medical staff. For example, Medicare Conditions of Participation (COP) have been static for decades and require every hospital to maintain an organized medical staff. Many state hospital licensing regulations mirror this requirement. The JCAHO has also been a barrier to more robust evolution of hospital-physician relationships and its new proposals for medical staff standards reflect its outdated world-view. I will come back to these proposals in a moment but let's look at what is happening in the real world of 21st century health care. Physicians are increasingly looking to hospitals to employ them or contract for their services. As practice overhead rises inexorably and reimbursement shrinks, more and more doctors need a deep pocket employer to shield them from financial insolvency. Younger doctors, more invested in personal and family interests than their predecessors, are commonly looking for straight employment relationships rather than the daunting challenges and risks of running a small business/practice. At the same time, hospitals can no longer survive the uncertainties of service provided by a volunteer medical staff. As it gets harder to find physicians willing to take emergency room call, serve in clinics, accept positions on committees, provide peer review or serve in leadership roles, hospitals are looking to relate to physicians through the performance guarantees provided by employment or contract. This trend towards an employed physician work force is also being sparked by the growing shortage of doctors nationwide. Some estimates envision this shortage to reach 200,000 by the year 2025 as baby boomer doctors retire. Hospitals that don't identify and lock in physicians today through contract or employment may find an inability to locate needed specialists in the future. Furthermore, as the external demands on hospitals to demonstrate their quality increase, the degree of cooperation, collaboration and compliance required from physicians will be much harder to obtain from private entrepreneurs than from employed and contracted physicians. Unless the organized medical staff can transform itself into a potent engine for demonstrably improved quality its relevance will continue to diminish. Of course, some medical staffs are tackling this challenge head on and with time we will be able to observe their success.

This brings me back to the latest proposals put forth by JCAHO. Revised medical staff standards have been published for field review and I encourage readers to review them and provide feedback to JCAHO. They can be found on the JCAHO website at www.jacho.org. These proposed standards are an improvement over several abortive efforts by the JCAHO in 2004 and 2005 to use accreditation Elements of Performance to micromanage the governance of hospital medical staffs. Nevertheless, these new revisions will once again force some hospitals to invest time and energy into the bylaws paper chase - going through the onerous process of revisions in order to satisfy overseers in Chicago. It will be yet another distraction from the important work of improving patient safety and hospital quality. No wonder doctors so often feel that compliance with JCAHO regulations is just a pointless game- sometimes it really is.

The bigger shadow being cast on health care this February results from the final congressional approval on February 1st by the U.S. House of Representatives for S.1932, the Deficit Reduction Act of 2005 www.cbo.gov. This huge budget bill will cut more than 6 billion dollars from Medicare over the next five years and contains the most significant legislative changes to the Medicare program since the Medicare Modernization Act. Of particular interest to hospitals, the Deficit Reduction Act extends a CMS freeze on issuing new provider numbers to specialty hospitals for six additional months. During this time CMS will prepare a congressionally mandated plan to amend federal regulations to address issues of concern regarding these limited service facilities. Expect lobbying by all interested parties to heighten during the first half of 2006 as a result. The Budget Reduction Act also requires CMS to initiate a two year demonstration project(s) around hospital gain-sharing arrangements. There is intense interest in pursuing such programs to reduce hospital costs. While the OIG recently relented in its previous opposition to gain-sharing, there are still considerable obstacles to its future growth- the most formidable being the various anti-kickback and Stark laws. While gain-sharing has great potential to induce short-term cost savings by motivating hospital-physician collaboration, many detractors believe that there will be no ongoing benefit to these arrangements after initial savings are achieved.

As is the nature of shadows, those currently being cast by JCAHO and the feds do not provide the illumination we need to take health care to a new plane of excellence. But we all have to live and work in these shadows and adapt- no wonder healthcare is such a challenging field of endeavor!

Best Regards,

Todd Sagin, MD, JD
Vice President and Medical Director
The Greeley Company

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