CEO SUMMARY: It is uncommon for a major health system to switch its CLIA lab accreditation business from one accrediting body to another. Yet, just in the past 18 months, that decision was made by the Veterans Administration, Ascension Health, and Providence Health. This is an important development for the entire clinical laboratory profession, because these decisions may reflect significant changes in how hospitals want to operate their clinical laboratories.
IT IS A MAJOR EVENT WHEN A MULTI-HOSPITAL HEALTH SYSTEM decides to move its CLIA lab accreditation business from one accrediting body to another. The fact that at least three health systems—representing 372 hospital labs—have made this same decision in the past 18 months is noteworthy.
As explained here, three health systems are known to have switched the CLIA accreditation of their respective labs away from the College of American Pathologists (CAP) and to The Joint Commission (TJC). These health systems and the number of hospitals they own are:
• Veterans Administration (170 hospitals),
• Ascension Health (151 hospitals),
• Providence Health (51 hospitals).
Swing in Market Share
This shift away from one CLIA accrediting body to another by three major health systems in an 18-month period represents a huge swing in market share of CLIA accrediting services. The magnitude of the market share swing can be calculated in two ways.
One way to calculate market share of CLIA accreditors is to calculate the number of hospital labs switching their CLIA provider as a percentage of all community, acute care hospitals. Data from the American Hospital Association (AHA) show that, in 2020, there were 5,198 community hospitals. Thus, the 372 hospitals involved in the switch represent 7.2% of all community hospitals in the U.S.
A second—and more relevant—way is to calculate this same market share number by subtracting out the 1,821 rural hospitals reported by the AHA. The 372 hospitals switching their CLIA accrediting bodies represent 11% of 3,377 non-rural community hospitals.
However, that 11% number might increase if a story on the lab industry grapevine proves to be true in the near future. Credible rumors are circulating that one of the nation’s largest for-profit hospital corporations is studying how to handle its CLIA accreditation needs going forward.
The largest for-profit hospital corporation is Community Health Systems with 188 hospitals. The second largest for-profit hospital company is HCA with 166 hospitals.
By using the hospital count from the smaller of the two big for-profit hospital operators, that would potentially add another 166 hospitals switching their CLIA accreditor to the 372 hospitals known to be in the process of changing, for a total of 538 hospitals, or 15.9% of the nation’s 3,377 community hospitals.
This produces a useful estimate of the market share swing in hospital lab accreditations now occurring between two of the largest organizations with CLIA accreditation authority. At a minimum, The Joint Commission has gained a 7% market share by adding the three health systems that have stated their decision to switch. And if TJC were to gain one of the largest for-profit hospital corporations as a client, it will have gained a sizeable 15.9% chunk of the CLIA hospital lab accreditation market.
These statistics demonstrate why The Dark Report believes a highly significant trend is unfolding in how hospitals and health systems handle the CLIA accreditation of their clinical laboratories.
It is a major decision anytime an organization switches its CLIA accreditation business to a different accrediting body. The fact that three large health systems made this same decision over the past 18 months is evidence that important changes are happening behind the scenes in the nation’s hospitals and their clinical labs.
Lab administrators and clinical pathologists with years of experience know that the CLIA accreditation debate involving CAP and TJC has always centered upon one key difference in how each organization handles a lab’s accreditation inspections. The College of American Pathologists uses a team of peer assessors to conduct the on-site inspection. By contrast, The Joint Commission uses professional assessors who are trained and paid by TJC.
Since the advantages and drawbacks of each organization’s inspection model have been argued since the implementation of CLIA regulations in 1992, what might have changed in recent years to cause the parent organizations of 372 hospitals to leave one CLIA accreditor and move to another?
Many clients and regular readers of The Dark Report know the pro and con arguments put forth by advocates of each approach to CLIA lab accreditation. They include the following:
• Cost savings from using a CLIA accreditor that is less expensive.
• Standardization of Medicare accreditation within a single hospital and health system by using the same accrediting body for the entire hospital, including the clinical lab.
• Avoiding the disruption caused by an inspection involving a large team of peers roaming throughout the laboratory for several days.
• The benefit of a lab being inspected by peers who can share best practices.
• More consistency in CLIA inspections because professional assessors work from a common standard.
• The benefit of not having to send a reciprocal inspection team of key lab staff to another hospital lab and have them gone for several days.
• Alternatively, the benefit of having one lab’s assessment team learn useful knowledge from the clinical lab they are inspecting that they can take back to their laboratory.
The ongoing transformation of the U.S. healthcare system may cause hospitals and health systems to revisit every aspect of their operations and compliance with federal and state laws. The Dark Report will provide additional intelligence briefings on lab accredition in upcoming issues.