creditation, however, has become a mark of excellence achieved by only a fraction of regulated entities.

The National Committee for Quality Assurance (NCQA) program for the accreditation of managed care organizations illustrates this model (NCQA, 2001a). Managed care organizations are regulated by state insurance departments, state health departments, or the U.S. Department of Health and Human Services (DHHS) (if they are Medicare or Medicaid managed care organizations). They also seek accreditation, however, to demonstrate their commitment to excellence, as many employers and other purchasers of managed care organization services look to accreditation as an indicator of performance above the required minimum.

In a second model, accreditation substitutes private regulation for public regulation. One version of this is seen in accreditation of institutions of higher education, for which formal government regulation is (for various reasons not explored here) largely absent. Accreditation serves effectively as the only oversight system.

Another variant of nongovernmental voluntary accreditation is seen under Medicare's “deemed-status” program, in which the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) hospital accreditation program serves as an alternative to state certification, which uses Medicare 's own federal regulatory standards as a basis for hospital participation in Medicare (Jost, 1994). JCAHO's accreditation standards are quite different from Medicare's own standards, but JCAHO accreditation is accepted in the place of Medicare certification. That is, a hospital or health care facility is deemed to meet federal standards by dint of being accredited by JCAHO and is thereby authorized to participate in (and be paid through) Medicare.

There are significant benefits to the use of accreditation as an alternative to regulation and to the deemed-status model in particular. Accreditation reduces the cost of oversight to government, as it is effectively paid for by user fees rather than taxes. Accreditation programs, especially nongovernmental programs, tend to be much more flexible and responsive to change than regulatory programs because they are not bound by the rigidities of administrative rulemaking procedures and are more responsive to regulated constituencies. Accreditation, however, also has its costs. It is not directly accountable to the public, and there is a constant concern that the “fox is guarding the henhouse” (DHHS OIG, 1999a,b). Even JCAHO is not given unfettered authority to regulate hospitals for Medicare. The Health Care Financing Administration (HCFA), which administers Medicare, retains authority to directly assess (or “look behind”) the accreditation of hospitals. HCFA conducts its own surveys for cause, surveying a small fraction of validation surveys each year, and reviews JCAHO's “deeming” authority at least once every 6 years (Lewin Group, 1998). Furthermore, if accreditation is to be more than a pro forma exercise, it can be resource-intensive. This can be corroborated by any health care facility or educational administrator who has recently undergone accreditation.

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