Health Care Compliance, Research Paper Example

Compliance is a top issue for many health care organizations.  The importance of the issue is not only related to the large number of government regulations that an organization must comply with in order to stay in business, but also because compliance affects consumers’ perceptions, particularly in such a competitive area as health care (Martin, Shulman, Santiago-Sorrell & Singer, 2005).  Compliance requirements exist at every level of the organization. First, and perhaps the most important, is meeting requirements to keep patients’ data private according to the guidelines established in HIPAA.  In addition to privacy concerns, health care organizations, if they have Medicare and Medicare patients, must also comply with classification and payment specifications so as not to run afoul of the US Federal Claims Act (Laurence & Richards 2003).  Not only will an organization’s inability to comply with regulations result in potential sanctioning by government organizations, but it also may result in the loss of customer flows once the news is released. In a study conducted by Laurence and Richards, the authors  found that a majority of health care organizations did not have robust compliance methods in place to comply with basic regulations regarding payment and classification, potentially due to the expenses involved (Laurence & Richards, 2003). The ability to comply with existing regulations is ultimately the lifeblood of any health care organization to stay in business.

Strategic planning should play a key role in the management function, particularly for health care organizations.  The logic behind such statements is easy to follow: that is, in order for managers to plan ahead for how the organization will change and evolve to meet new regulatory and customer needs, strategic planning must be a key role of this process. But what is strategic planning? As Henry Mintzberg explores in his famous article “The Fall and Rise of Strategic Planning,” strategic planning was initially envisioned as a key concept to increase the overall competitiveness of business organizations (Mintzberg, 1994).  As Mintzberg also points out, however, strategic planning became bogged down with managers habit to “plan”, without tying those plans to a compelling “strategic vision” that would move the organization forward in the future (Mintzberg, 1994).  As a result, the true power of strategic planning was reduced to simply an exercise in producing and implementing disparate management plans.   A good example that illustrates the importance of strategic planning at the managerial level is the latest round of health care reform that will drastically change the existing business model of many healthcare organizations including hospitals, insurance companies, and long-term health care providers. Indeed, some hospitals that were able to intimate the contours of general trends already moved their business model away from Medicare patients, that may pay less and less over the long-term, and more towards third-party insurance payers who would give the hospitals higher margins. Strategic planning should help the organization intimate future changes in the regulatory landscape.

Finally, strategic planning concepts can be used to effectively plan for compliance in a number of ways.  First and foremost, strategic planning can be used to ensure that the health care organization is meeting its current compliance requirements (Martin, Shulman, Santiago-Sorrell, & Singer, 2005). That is, managers should have a system (preferably a number of integrated systems) including information technology and compliance officers that make sure current compliance with existing regulations.  Perhaps even more important, however, is to also develop plans to track where new regulatory regimes are going in order to voluntarily comply with new initiatives that will place the organization ahead of the curve when it comes to full implementation.  Overall, due to the complexity of ensuring compliance, health care firms must make sure they are devoting enough resources and talent via the management function.

References

Lorence, D.P. & Richards, M.C. (2003).  Adoption of regulatory compliance programs across United States healthcare organizations: a view of institutional disobedience.  Health Services Management Research 16(3), 167-178.

Mintzberg, H. (1994).  The Fall and Rise of Strategic Planning.  Harvard Business Review.  Jan-February 1994, 107-114.

Martin, D., Shulman, K., Santiago-Sorrell, P., Singer, P. (2005).  Priority-setting and hospital strategic planning: a qualitative case study.  Journal of Health Services Research & Policy, 8(4), 197-201.

Swayne, L., Duncan, W., Ginter, P. (2006).  Strategic Management of Health Care Organizations.  London: Wiley-Blackwell.