After 11 years of alternately promoting, defending and trying to make the IMSystem a monopoly open to competition, the Joint Commission on Accreditation of Healthcare Organizations is ridding itself of the performance measurement system, MODERN HEALTHCARE has learned.
The Oakbrook Terrace, Ill.-based JCAHO has signed a letter of intent to sell the system to the MedStat Group, the operator of a competing system.
According to a two-paragraph joint statement written Aug. 11 and obtained last week by MODERN HEALTHCARE,, the JCAHO is "exploring opportunities to transfer ownership and operation (of the IMSystem) to assure the stability of this important venture over time."
Ann Arbor, Mich.-based MedStat is conducting a business assessment of the IMSystem, which should be completed by the end of September.
In the meantime, Deborah Nadzam, a vice president of the JCAHO, who helped guide the performance measurement project, resigned. Nadzam will become the administrative supervisor of Cleveland Clinic's health quality institute.
Spokespersons for MedStat and the Joint Commission declined in-depth comment on the sale or its conditions.
Janet McIntyre, spokeswoman for the JCAHO, said the IMSystem was being sold so that the commission could "concentrate on the core accreditation process." She added that the system had served as a useful testing ground for the JCAHO to develop its vision for incorporating performance measurement into accreditation.
However, she said, "healthcare organizations told us they wanted to be able to choose their own performance measurement system, and that's where we've moved."
The JCAHO and MedStat maintained in their statement that "any ownership change would assure a seamless transition for IMSystem users and continued adherence to high standards of data confidentiality."
Although it has not made a public announcement about the sale, the JCAHO has notified the 224 hospitals and nursing home clients that use the IMSystem. MedStat has 94 hospital clients for its Outcomes Analyst product, according to a census the JCAHO made public as of May 30.
The IMSystem was a lightning rod for criticism of the Joint Commission while the system was being introduced in 1992. The agency at first mandated that all accredited organizations use it to report clinical outcomes to the JCAHO.
But in testing, surveys revealed, the system failed to give clinicians the tools they needed to improve medical outcomes.
At the same time, many hospitals were investing in other performance measurement products from independent vendors. After open revolt erupted among hospitals and the American Hospital Association in late 1994, the Joint Commission was forced to retreat. It opened the door to competing performance measurement systems and repositioned the IMSystem as just one among many options from which hospitals could choose.
Not all were placated. One hospital chief executive officer, Jerrold Maki, of Mercy Medical Center in Springfield, Ohio, wrote in a 1995 letter to MODERN HEALTHCARE that "the JCAHO should immediately stop any further development of the IMSystem, sell the current system and return any proceeds from the sale to the hospitals."
Still, outside vendors resented having to compete with the house organ when they applied for acceptance to the Joint Commission's 1997 Oryx initiative, which now requires all hospitals and nursing homes to submit performance measurement data as a part of the accreditation process.
Indeed, the Joint Commission's World Wide Web site contains a large section describing all the things the IMSystem can do. The contact person named is Nadzam, the resigning JCAHO vice president who helped guide the performance measurement project.
Jean Chenoweth, vice president of HCIA, a Baltimore-based healthcare information company and one of the approved vendors for Oryx systems, said: "I think it makes sense for the Joint Commission, which reviews all of the vendors for Oryx compliance, to rid themselves of a conflict of interest."
Without the JCAHO's operating its own product, all vendors will have a more equal relationship with the commission. "It levels the playing field for all parties," Chenoweth said.
That assumes the break will in fact be clean and final. McIntyre declined to answer whether the JCAHO would receive a royalty from MedStat for each use of the product.
She said no employees would lose their jobs if the IMSystem is sold. They will be given other performance measurement duties.
In 1994 there were 29 full-time equivalents at the Joint Commission working on the IMSystem, and the JCAHO had considered increasing the number to 37 by 1998. But reversals of fortune later led to layoffs within the group. McIntyre declined to say how many people work on the system today.
Neither would she divulge annual revenues from the IMSystem or whether the system makes a profit.
MedStat was purchased in 1996 by the Canadian publishing company Thompson Publishing Group. Because it is privately held, MedStat does not make public its revenues and profits.