Health care institutions are challenged to comply with a broad array of rules and regulations generated by government, accrediting agencies and organizations, third party payers, citizen advocacy groups, and the ethical codes promulgated by the organizations to which health care professionals belong (Credo Group, 2004). Complying with often demanding regulatory systems is costly. As noted by the Credo Group (2004), compliance costs can erode profitability in any organization. Given that health care institutions must meet multiple compliance standards, a great deal of time, energy, and money is dedicated to ensuring compliance, thus reducing the profitability of the organization.
The typical health care organization is being challenged by new regulations in the form of the Health insurance Portability and Accountability Act (HIPAA) to invest in new technologies that will protect the privacy of patient data while also facilitating record-keeping and data storage and transfer. Fogarty (2006) stated that the HIPAA, in tandem with other compliance requirements, mandates that institutions invest in costly technology, which then must be utilized by individuals who are trained to manage these systems properly. Training is expensive and as new technologies are acquired, training becomes an ongoing set of activities. Nevertheless, to be in compliance with HIPAA, an organization must be ready to dedicate a substantial portion of its financial resources to purchasing and using technology.
Additionally, meeting the requirements of accrediting agencies such as the Joint Commission on the Accreditation of Health Care Organizations (JCAHO) requires organizations to put into place annual audits of quality indicators along with continuing education programs, which must be delivered to virtually all health care professionals regardless of their field of specialization (Fogarty, 2006). These activities are in and of themselves costly ...