Monday, September 26, 2011
The Cost of Regulatory Compliance
I heard an alarming statistic the other day that the current administration is responsible for an average of ten new Federal regulations per day since the President took office nearly three years ago. The majority rest with the EPA and the Dept of Energy, but healthcare continues to have its share. In fact, the cost of regulatory compliance in hospitals and health systems nationwide now averages 26% and some estimate as high as 40%. In Canada, it is 3% and 10% in the United Kingdom. Although regulations on both a state and federal level are necessary, that's a heck of a lot of money committed to ensuring compliance with the many regulations that we face each day. Equaling frustrating is the number of regs that are vague or contradictory and always subject to misinterpretation leading to fines, damages and / or penalties. It is interesting that regulatory compliance is rarely mentioned as a contributing factor to the high cost of healthcare.