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The cost of being out of compliance in healthcare facilities Blog Feature

By: Katie Senters on December 20th, 2018

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The cost of being out of compliance in healthcare facilities

Compliance | vendor credentialing | Hospital Safety | Vendor Credentialing Services | Hospital Security

Let’s start with a quick thought experiment: what would $600 buy for your healthcare facility? 

Now, let’s take that $600 and multiply it by the number of employees at your organization. So, for a staff of 100, for example, you would have $60,000 to spend. What would you spend it on? A piece of new equipment? Updating a waiting room to create a better patient experience? Maybe a new software application that would speed along pre-authorizations? Or tablets to make patient check-in easier?

Approximately $600¹ is the cost, per employee, of being out of compliance. So, if you were working at a non-compliant facility, you wouldn’t be buying anything with that $60,000 – you would be paying the fines your facility accumulated because of non-compliance.

We can all agree that we would prefer to spend money on things that have a direct impact on patient care and satisfaction. With the ever-increasing regulatory burden in healthcare (one recent report found that as of March 2017, hospitals with post-acute care facilities had as many as 629 compliance requirements to contend with²), it is easy to understand why organizations can sometimes overlook the importance of compliance in their supply chains. However, ensuring vendor compliance can be one of the least labor-intensive and most cost-effective ways of avoiding many of the financial consequences of non-compliance in your supply chain.

Mitigating Financial Risk with Vendor Compliance

Now, let’s take a look at what goes into that $600 compliance difference. According to an article published by the Healthcare Financial Management Association, HIPAA fines and litigation stemming from bad patient outcomes are the main drivers.³

HIPAA fines can quickly grow in our electronic age, where patient information is only a click away.  But, the greater financial jeopardy comes from litigation. Penalties that result from preventable infections or poor patient outcomes cost the healthcare industry millions every year.

The DOJ requires that every hospital protect their patients’ personal privacy and safety, as well as take infection control precautions. The documentation generated by a comprehensive vendor credentialing program can be a vital tool when demonstrating reasonable action was taken to ensure patient privacy and safety.   

So, given the inherent financial risks of non-compliance, the question becomes, why wouldn’t you protect your organization with a vendor credentialing program?

Hospital and Healthcare Facility Vendor Compliance Assessment Questions

If you haven't done so recently, it may be time to assess how well your vendor compliance program is working for your organization. Here are our top questions to ask your facility at the start of this process:

  1. Are we able to confirm, in writing, that we are tracking all vendor activity within our facility? Can we produce time logs and other materials in a timely fashion if they are requested?  Do we have access to records going back at least five years?  Can we see who is in the facility in real time?
  2. Are we able to confirm, in writing, that the visiting vendor has passed all health and safety checks every time they are given access to our facility? Do we save those records for at least five years?
  3. Are we taking advantage of technology that creates ease-of-use for our staff and our vendors? Or, do we rely on a predominantly manual process that is taking staff away from other tasks?
  4. Do we have complaints from vendors about wait-times, cost, or the difficulty of applying for credentials?

Answers to these questions quickly provide a picture of the health of your vendor credentialing process and give you an idea of how to structure your program moving forward.

Non-Compliance Costs: Not Just Monetary

A non-tangible that is just as important as the financial consequences of non-compliance is the risk to a facility’s reputation after an incident has occurred. When a community’s confidence has been undermined, it can take years to rebuild. An organization’s commitment to compliance demonstrates a focus on patient safety and quality of care.

Our goal at symplr® is to make the vendor credentialing process easy and cost-effective for healthcare facilities. Get in touch with our team of credentialing experts to learn more about how we can drastically reduce compliance risk and protect your organization’s finances and reputation.

¹ Greg Carroll. “Study: Non-Compliance Problems Cost 3X More Than a Strong Compliance Program.” Enterprise Compliance Today, 21 Jan. 2013, http://www.fasttrack365.com/blog/bid/206651/Study-Non-Compliance-Problems-Cost-3X-More-Than-a-Strong-Compliance-Program.

² American Hospital Association. Assessing the Regulatory Burden on Health Systems, Hospitals and Post-Acute Care Providers. https://www.aha.org/guidesreports/2017-11-03-regulatory-overload-report.

 

 

About Katie Senters

As the National Director of Sales at symplr, Katie Senters leads the business development team. She is passionate about listening to clients and helping them reach their credentialing, compliance, and safety goals. Katie has a unique and comprehensive healthcare SaaS background. Her experience includes implementing solutions and successfully managing client relationships with large, complex organizations such as the federal government, integrated delivery networks, pharmacies, and colleges. Prior to joining symplr, she lead the National Accounts team at the National Healthcareer Association, which is a division of Ascend Learning. Katie received a Bachelor of Science degree in Speech-Language Pathology and Audiology from West Virginia University.