Nolan, Patricia MD, MPH; Bialek, Ronald MPP; Kushion, Mary L. MSA; Lenaway, Dennis PhD, MPH; Hamm, Michael S. CMC
Patricia Nolan, MD, MPH, is Adjunct Clinical Associate Professor, Department of Community Health, Warren Alpert School of Medicine, Brown University, Providence, Rhode Island.
Ronald Bialek, MPP, is Executive Director of the Public Health Foundation, Washington, DC.
Mary L. Kushion, MSA, is Health Officer, Central Michigan District Health Department, Mt. Pleasant, Michigan.
Dennis Lenaway, PhD, MPH, Director, Office of Standards and Emerging Issues in Practice, Office of Chief of Public Health Practice, Centers for Disease Control and Prevention, Atlanta, Georgia.
Michael S. Hamm, CMC, is Principal, Michael S. Hamm & Associates, Rockville, Maryland.
Corresponding author: Patricia A. Nolan, MD, MPH, Department of Community Health, Warren Alpert School of Medicine, Brown University, PO Box G-S121, Providence, RI 02912 (Patricia_Nolan@brown.edu).
In 2004, the Exploring Accreditation Project* was launched to explore the feasibility and desirability of a voluntary national program for accrediting governmental public health departments. A Finance and Incentives Work Group (FIWG) was created to consider questions related to cost and funding and how incentives may be used to encourage participation by public health departments. Their charge included the following tasks:
* Determine a range of costs associated with a national accrediting program, based on models developed by the Steering Committee.
* Consider models for financing a voluntary national accreditation system.
* Examine options for providing incentives for parti-cipation in the accreditation system.
* Draft the business case for the national system.
In 2006, the Steering Committee produced a report based upon the FIWG's work and that of committees devoted to other aspects of a proposed program.1 This article examines the FIWG's findings related to financing and providing incentives for a voluntary national public health accreditation program.
The FIWG met several times beginning in August 2005, contributing to a proposed model that was distributed for public comment by the Exploring Accreditation Steering Committee from May through July 2006. The work group considered information from many sources: the scientific literature, healthcare accrediting organizations, professionals in related fields, and public health leaders. They reviewed successful state-based accreditation and assessment programs, which acted as learning laboratories for a national voluntary program.† These data were amassed to develop lists of cost drivers and multiple operating options, create detailed financial models for funding these operations, and weigh various incentives for participation. The group submitted its business case to the Steering Committee in August 2006.
The following are results of the work group's efforts and recommendations with regard to the costs, financing opportunities, and options for incentives that together make a business case for a national voluntary public health accreditation program.
Range of costs
The conformance assessment process model on which the work group based its financial considerations included agency readiness review and self-assessment, a review of the written materials by accreditation staff, an accreditation team site visit, and the creation of a recommendations report, and final determination of accreditation. A further process would be available for agencies that wished to appeal a decision of the accredi-tation body.
The work group generated a detailed list of the components of the program that would influence the cost of developing, implementing, and operating a voluntary national accreditation system (Table 1). Costs for the program would be related to its governance and administration, developing standards for and implementing the conformity assessment process, and evaluating the accreditation program.
The work group could not obtain consistent cost data from existing public health performance activities: data either were not collected, or were inconsistently defined, or had omitted significant in-kind services and government subsidies from the costs. The Joint Commission was felt to be too different in history and purpose to provide a useful source of data. Taking into account these cost drivers and the best options for each of them, the work group developed rough estimates for use in creating a hypothetical developmental budget for a 3-year development and pilot-testing phase to help predict the start-up costs of the proposed model. Adding assumptions about the number of applicants, the work group prepared a summary budget reflecting anticipated operational costs and revenues from fees for the first 8 years of the model program (Table 2).
The process used to project revenue noted in Table 2 is described in the following.
Models for financing a voluntary national accreditation system
It was considered crucial for the program to become self-supporting over time. A coalition among health philanthropies and governmental agencies, supplemented by in-kind contributions from the field, may provide start-up monies. As the program matures, applicant fees should become the primary revenue source, although subsidies from the trade associations, such as the Association of State and Territorial Health Officials and the National Association of County and City Health Officials, and/or from the federal government, will probably continue to be necessary.
Public comment solicited in the summer of 2006 noted that cost and time were the most common issues that would lead potential applicants to oppose the development of a new accreditation program.* An Internet survey† was used to present a range of possible fee amounts to state and local health department respondents and gauge their willingness to pay. State health officials (n = 37) and local health officials (n = 215) were surveyed on their reaction to a range of possible fees. State officials chose among fees of $10 000, $12 000, $15 000, and $20 000; local health departments chose among fees of $5 000, $10 000, $12 000, and $15 000. Of the state officials, only 13 percent were willing to pay a fee of $10 000 or more; of the local health department respondents, 25 percent (n = 54) were willing to pay a fee of $5 000 or more, and 17 percent (n = 36) selected only the lowest ($5 000) fee. The majority of all respondents selected a “don't know” or “depends” response at each fee level. More than two thirds of all respondents agreed that willingness to pay would be affected by the availability of grants, and willingness to pay was frequently stated to be on the basis of the perceived benefits of accreditation and whether accreditation costs were allowable costs for grants. Based on the costs calculated for the program and the information from surveys, proposed fees for budgeting purposes were set at an average of $10 000 for local health departments and $20 000 for state health departments.
Potential demand was also calculated in developing a financial model. The project considers all state, territorial, tribal, and local governmental health departments to be eligible for accreditation; there are approximately 2 900 local health departments and 51 state health departments (including Washington, DC).* Feedback from presentations and telephone interviews held in 2006 demonstrated that there exists an enthusiastic initial applicant pool, particularly if the final standards and conformance process are credible. At the same time, participant costs are perceived to be a significant barrier and skepticism remains about the best use of limited resources. Based on the probable barrier the higher projected fees would pose, the work group decided to use conservative numbers initially and assume gradual uptake as the new entity demonstrates its value to state and local health departments, and departments work these costs into their budgets and grant applications.
Using the conservative estimates, the program would show a deficit until year 7, if depending only upon fees for income. The key stakeholders in the program would be expected to help support the program while it became self-sufficient.
In considering potential incentives, the group examined state accreditation programs, weighed respondents' concerns about costs and desire for benefit, and discussed “carrot and stick” approaches to encouraging participation.
Potential applicants' opinions about cost indicate that incentives that provide financial support for accreditation-related activities and enhance program efficiencies might be most effective. Most state programs include subsidies for the applicants, preferential funding for accredited agencies, and/or subsidies for correcting deficiencies. Subsidizing initial applications for accreditation may be an important incentive for resource-poor health departments, as well as a way to avoid becoming a program solely for richer departments. The work group also discussed the benefits of using new grant dollars to “jump start” the accreditation program, thus allowing the addition of new dollars to be available only to accredited health departments. This “hold harmless” provision would not penalize any health department, while providing a financial reward for those that become accredited.
The benefits of accreditation to public health departments were also considered. Literature reviewed by the work group turned up limited empirical evidence of such benefits. Change in health outcomes is held out as the “criterion standard,” but research designed to demonstrate effects of accreditation on health outcomes are complex and fraught with methodological and policy minefields. The Steering Committee determined that the accreditation program should incorporate ongoing evaluation of the program. Such evaluation would not only guide future decisions but also demonstrate credibility of the program and the impact of accreditation on performance, which might be an incentive to organizations desiring to improve their outcomes.
The consensus among respondents to this program was that it should not be mandatory. For this reason, incentives that could be interpreted as coercive or that disrupt access to federal or state funding streams now available to health departments were not recommended by the work group. An example of a positive incentive would be for grantees to be allowed to use the results of an accreditation review as the required reporting data from health departments, thus reducing reporting requirements. At the same time, experience in state programs demonstrates that participation is higher if the flow of funding is tied to accreditation in an effective manner. Perhaps, when the voluntary accreditation program has demonstrated its value by helping to improve performance and outcomes, it may become acceptable to create clear financial incentives through grant programs (eg, a health department may not be eligible for certain grant funds if it is not accredited). At a minimum, the use of grant programs to create incentives for accreditation should be reexamined as the voluntary accreditation program is evaluated. Before such evaluation, “carrots,” or positive incentives, are recommended, rather than “sticks.”
A highly participative plan for developing the standards and measures, and a careful development of the assessment process, including recruiting, training, and validating the work of survey teams, and closely managing the accreditation board's decision process are recommended to encourage trust in the program, which will act as an incentive to participate. Respondents stressed the importance of involvement in setting standards and confidence in the assessment process during the public input phase of the project.
Finally, state governments, as well as the federal government, are important sources for incentives for applicants. The Steering Committee recognized and endorsed methods of including existing and developing state accreditation and performance improvement programs. States, federal agencies, and foundations may provide financial and technical support for applying for accreditation, for making improvements to meet standards, and for facilitating continuous quality improvement to maintain accreditation status.
The Business Case
The work group concluded that this model for a voluntary national accreditation program for public health agencies is feasible if key stakeholders and sponsors are willing to finance a developmental phase of up to 3 years at an estimated cost of approximately $2.4 million and to cover an anticipated operational deficit of more than a million dollars during the first 3 years of full operation. Investment from such stakeholders, including federal agencies and/or philanthropic organizations, will also be necessary to help fund continuing research demonstrating the impact of accreditation on performance. This finding was adopted by the Steering Committee in August 2006, after it had selected the investment options it found appropriate.
Established state programs are competitors for the national program within their respective states, and recognizing the equivalency of state-based projects may make the national program more feasible. Recognition could take several different forms, but would entail a determination of equivalency of standards and conformance assessment processes. Once equivalency is established, the national program could recognize the state's accreditation decision (deeming), accept the state's conformance assessment and make its accreditation decision based upon it (an agent for assessment), or rely upon the state-based program for technical expertise to prepare applicants for accreditation and reaccreditation (consulting and training services). States may or may not decide to use the national program to assess performance. Revenue assumptions were based on a slow start up among small health departments and those currently being assessed by state-level programs.
Long-term success will depend upon support of application fees and compliance activities through continuous quality improvement grants to health departments, indirect cost allowances on grants and contracts, and adjustments in fees for services to accredited health departments, just as such sources are available to health facilities to cover the costs of maintaining high-quality performance.
This work group used a business case approach to approximate cost ranges for the developmental and early operating stages of a voluntary national accreditation program. The method has important limitations:
* There are wide ranges of designs and little definitive data on costs of such a program.
* As an implementation organization begins shaping an actual program, the model and the assumptions used to project costs will need to be revisited.
Despite these limitations, generating a business case for the project provided a means for discussing feasibility of providing a national program with some specificity. Based on the available evidence and considering the challenges to public health for sustained funding over time, the preliminary conclusion is that a national voluntary accreditation program can be cost-effective.
The costs of not instituting a national public health accreditation program have not been calculated; however, some may surmise that local variation may result in the dominant use of less than best practices in many communities; and the continued emergence and expansion of state-based accreditation initiatives may result in duplication, inhibit creation of a consistent set of data from accreditation programs, and complicate efforts to expand the evidence base for public health practice. If the public health community does not develop an accreditation program, others may. Indeed, health departments already seek accreditation for several of their programs from a variety of bodies that accredit healthcare organizations.
Possibly, the most compelling reason for developing a voluntary national accreditation program for health departments that is focused on improving quality and performance can be found by turning to the hospital sector: accreditation is a major force for maintaining quality improvement in the face of resource constraints. Through a recent initiative of the Institute for Healthcare Improvement, more than 3 100 accredited hospitals implemented quality improvement processes, which resulted in more than 122 000 saved lives during an 18-month period.2 The institute has now embarked on a new campaign to reduce medical harm in hospitals by 5 million incidents over a 24-month period. Both of these population-based initiatives are helping to improve the public's health.
With a well-designed voluntary national accreditation program for health departments focused on quality and performance improvement, health departments will be collectively able to demonstrate measurable results based upon consensus standards. At this time, resources for public health services continue to decline in many areas of the country, and public health departments struggle to compete for public dollars. If the public health community does not move in this direction, the costs to public health departments due to the lack of a credible measurement of public health work may be very substantial. Defining an affordable system of accreditation and developing incentives for participation by a broad range of state and local health departments appear feasible.