Considering Accreditation

“Give me more paperwork, increased document management requirements, more fees and expenses.” For some, this statement is synonymous with “We should be accredited.” This attitude has been supported by owners, managers and bean-counters who try to make businesses operate faster, easier and cheaper. It is, however, a myopic view.

When my firm is engaged to guide profit improvement, we generally focus on cost reductions since we can’t increase prices. Although the additional activities and expenses related to accreditation may seem opposed to cost reductions, some of the practices that we have recommended to non-accredited providers are promoted by the accreditation process.

In other words, implementation of quality management systems that support accreditation also support profit improvement and, thereby, provide economic value.

• The Obvious Some providers have pursued accreditation because it brings a related opportunity to increase or maintain sales volume. Now, with the Medicare Modernization Act, it will be a requirement to maintain sales volume, so “no accreditation” may equate to “no value.”
• Examination Providers often get caught up in building the business and fail to build systems with efficient processes. Systems evolve, are rarely efficient and almost never integrated with other systems. The result is inefficiencies brought on by multiple ways to accomplish the same process, redundancies set up by departments that don’t consider what is done elsewhere in the company and waste brought on by backtracking to perform the forgotten step(s). In preparing for an accreditation survey, for example, one company realized it was writing the same information on four different forms. One person would complete a form and pass it on to the next person, and so on. By redesigning forms and databases, the company eliminated this time- and money-waster. Accreditation caused the self-examination.
• Systemization The first advantage of systemization is repetition. When we repeatedly perform a well-designed process, we learn to perform it more quickly. Saving time is saving money. Second, when we perform a well-designed process, we are less prone to mistakes. Of course this is one of the tenets of quality. Systemization helps us get it right so we don’t have to undo and redo. There is obvious economic value here.
• Documentation Have you ever started a job or task where the company has no documentation for reference and you are totally reliant on interviews to learn what is required? Have you ever tried to analyze what went wrong without documentation? Documentation with an appropriate purpose and design is a key component of efficient processes. Accreditation embraces meaningful documentation. We performed an activity-based cost analysis for a non-accredited provider who spent an enormous amount of time on patient education. By adding documentation to the patient education program, as embraced by accreditation, the company reduced its time in this endeavor by 75 percent. That equated to several thousand dollars — and a better result for the patient.
• Preparation A small non-accredited HME company was making three stock purchases each day. It cost $1.30 to complete a purchase order, $1.29 to get it authorized, $3.01 to place the order with the supplier, $4.40 to receive the order and $1.51 to put the order away. We won’t go on to include the cost of the accounting department’s work in handling and payment of invoices, or the expediting expense or downtime costs.

A similar accredited organization should be able to place fewer supply orders because its system indicates when supplies will be required. Being prepared for the work of the day also reduces downtime costs, expediting expense, etc.

So, accreditation adds economic value by reducing costs. I do not mean to indicate that an accredited provider is automatically efficient or that a non-accredited provider is automatically inefficient. The point is that the procedure for getting and maintaining accreditation leads to the implementation of efficient practices, which can improve profitability beyond its costs.

Wallace Weeks is founder and president of Weeks Group Inc., a Melbourne, Fla.-based strategy consulting firm. He can be reached at 321/752-4514 or by e-mail at [email protected].