Pa. Cuts Watchdog Role Over Hospitals State Inspections Have Been Turned Over To A Private Agency. Also They Are Required Less Often.

Posted: July 15, 1998

HARRISBURG — With little public notice or debate, the Ridge administration has privatized much of its system for inspecting Pennsylvania's 233 hospitals.

Inspections of everything from hospital fire-safety plans to infection control are being conducted once every three years, instead of every other year.

Most of the inspecting is not done by state regulators anymore. The task is in the hands of the nonprofit agency that accredits most of the nation's hospitals and is funded by the medical industry.

For more than a decade, state regulations had called for the Health Department to inspect each hospital every two years as a condition of renewing its license.

But last year, the state began giving hospitals the option of skipping the Health Department's review. To qualify, hospitals simply had to give regulators the results of an inspection done every three years by the Chicago-based Joint Commission on Accreditation of Healthcare Organizations.

Of the 146 Pennsylvania hospitals that have had their licenses renewed since January 1997, 113 chose to avoid Health Department review.

Ridge administration officials say the policy change - undertaken in close consultation with the hospital lobby, state records show - eliminates duplication and sets aside outdated state rules in favor of a superior private system.

The joint commission's approach to hospital quality is ``to keep raising the bar,'' said Molly Raphael, deputy health secretary for quality assurance.

Critics, including current and former Health Department officials, say this is the wrong time for the state to reduce its watchdog role.

With financial pressures and layoffs besetting the hospital industry, these observers say, hospitals are increasingly at risk for the kind of slipups that can lead to serious consequences for patients.

This month, for example, hospitals in the financially troubled Allegheny health system were reported to be experiencing supply shortages that alarmed some employees. The chain is considering filing for bankruptcy.

``The State Health Department has abrogated its responsibility to insure that citizens are protected from the worst inclinations of hospital administrators facing shrinking budgets,'' wrote Donna Gentile O'Donnell, a deputy Philadelphia health commissioner who heads a nurses advocacy group, in a statement distributed to legislators last month.

State regulators point out that the Chicago-based joint commission's hospital inspections are seen as the seal of approval by the federal government and most states. Pennsylvania had been one of a few states, including New Jersey, that performed its own licensure inspections.

Those same officials acknowledge that they have not followed their own rules in launching the new inspection system.

Regulators disclosed that since January 1997, they granted license renewals to a majority of hospitals without first obtaining results of the private inspections. That was in spite of a legal agreement that calls upon the state to review those private reports before renewing a hospital's license.

A Health Department spokeswoman said earlier this month that the department soon would announce a ``fine-tuning'' of the inspection policy. Spokeswoman Megan Neuhard did not offer details, but said the failure to review the joint commission's reports ``is one of the things that we are taking a close look at in our review.''

The decision to cut back on inspections stemmed in part from a loss of federal funding in 1994, officials said. Since funding for hospital scrutiny was slashed, 15 hospital inspectors were reassigned to nursing home oversight.

The Health Department currently has nine people overseeing Pennsylvania's 233 hospitals. The move to privatize inspections has caused no layoffs; the employees now focus on investigating complaints.

In New Jersey, Gov. Whitman sought legislation to privatize hospital inspections in 1994. Patients' advocacy groups and nurses' unions fought the proposal, and it failed.

The Ridge administration decided in late 1996 that it did not need the legislature's permission - or input from the public - to make a similar change in Pennsylvania's hospital inspection policy, officials said.

Administration lawyers say they relied on a three-paragraph amendment enacted by the legislature with no debate in 1992. The amendment says the Health Department ``may rely on the reports of . . . nationally recognized accreditation agencies.''

The department had begun using those reports as a basis to license some hospitals in 1994, but it did not begin regularly substituting them for state inspections until the Ridge administration launched its new policy last year.

Often, such major state policy changes are announced in the state's official journal, the weekly Pennsylvania Bulletin. Ridge officials said they decided that the hospital inspection matter required no such announcement.

Health Secretary Daniel Hoffmann signed off on a Nov. 21, 1996, ``action memo,'' which was not made public at the time but is contained in department records.

One interest group did have significant input into the policy change: the hospital industry.

The Health Department acknowledges that it worked closely with the industry's Harrisburg-based trade group, whose lobbyist enjoys special access to Ridge as a member of ``The Governor's Club,'' those who have pledged or raised $50,000 or more for Ridge's reelection fund. Administration officials say politics had nothing to do with the change in hospital inspection policy.

``This administration and this secretary are very committed to stakeholder input,'' said Raphael, herself a former hospital executive. ``Our relationship with the hospital industry . . . is to try to involve them in processes where it's appropriate - to listen to them and to their concerns.''

Internal Health Department records reflect regulators' concern about the industry's views.

``My only question is, `How will the industry respond?' '' wrote then-Health Department Policy Director Jeannine M. Bender - who had once been a hospital association lobbyist - in a Nov. 8, 1996, memo.

Once the policy was approved, regulators' first step was to ``meet with [the hospital association] to discuss proposal acceptability and timely implementation process,'' health department official Andrew Major wrote in the Nov. 21, 1996, memo.

Bender, now a lobbyist for Merck & Co., declined to comment on her memo. Major, who has moved to the Department of Public Welfare, could not be reached for comment.

Betsy Taylor, a hospital association policy specialist, said there was nothing wrong with her organization's desire to reduce state inspections.

``We didn't want two surveys. It made no sense,'' she said, adding that the understaffed state Health Department had been struggling to complete the inspections.

``Let's be honest,'' Taylor said. ``The states anymore don't have the luxury of having huge staffs.''

Former regulator William White, who was demoted and transferred in January 1997, after 10 years of running the state's hospital inspection program, offered a different view.

Instead of abandoning state licensure inspections, he said, the Health Department should have hired enough staff to do them correctly. White was removed after being accused of a host of transgressions, including poor memo-writing skills and speaking without permission to legislative auditors, state records show.

``My sense is that they were trying to accommodate the industry as much as they could,'' said White, who contends he was removed for protesting the new policy and has appealed his firing to the state Civil Service Commission.

Raphael, the deputy health secretary, declined to comment on White's firing or his views.

Hospital advocates and the Health Department argue that the Joint Commission's inspections are superior to those that had been conducted by White's inspectors. They note that the joint commission is the nation's premier hospital accreditation body. They also point out that Pennsylvania's hospital regulations, many of which were written in 1982, are badly in need of updating. In fact, the Health Department is currently rewriting them.

``Our regulations are really minimum standards,'' Raphael said. ``JCAHO's approach is to keep raising the bar.''

Health-care unions and public health advocacy groups have criticized the joint commission, saying it has a built-in conflict because it is governed and funded by the hospital and medical industries.

In a 1996 report, the Washington, D.C., watchdog group Public Citizen said the joint commission accredited 99 percent of the hospitals it inspected, even though it had found serious problems in more than half of them. The joint commission, while not disputing the findings, said it worked with hospitals to correct their problems.

Although the joint commission has sought to toughen its standards since then, fundamental conflicts remain, contends Sidney Wolfe, director of Public Citizen's Health Research Group.

``If you're the hospital industry, you'd much rather have regulation done by a private organization that you can control, rather than a state agency accountable to the public,'' said Wolfe, a physician.

The joint commission rejects the notion that it is controlled by the hospital industry, and hospital administrators say the commission's inspections are rigorous and thorough.

Dr. Mohammad Akhter, the former Missouri health commissioner who heads the Washington-based American Public Health Association, agrees.

``The Joint Commission's standards are always higher [than states'] and are consistently updated to be relevant to today's needs,'' said Akhter, whose group represents public health officials. ``Their inspections are a lot more sophisticated.''

Pennsylvania officials say they have not abandoned state oversight of hospitals. Besides examining complaints, state regulators still will conduct random inspections to monitor the joint commission's work, they said.

Some critics say neither the state nor the joint commission is giving the public what it really needs - concrete quality measures such as nurse-patient ratios, hospital infection rates, and patient injury rates by which to compare hospitals.

``Right now, the public doesn't get any of that,'' said Barbara Mallory, a Philadelphia Health Department nurse who sits on the Board of Nurses of Pennsylvania, an advocacy group. ``Patients have the right to be informed, not only about their medical options, but about the conditions of their hospital.''

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