Without adherence to these regulations, there is no JCAHO accreditation and without that accreditation, Medicare and Medicaid will not reimburse for health care in that facility (Joint Commission Requirements, 2009). For the amount of people receiving health care reimbursement through Medicare and Medicaid, this lack of accreditation could financially decimate a health care facility without that accreditation and reimbursement. Their only option would be to not accept Medicare or Medicaid patients.
JCAHO will have the some of the same fixed costs as any other business. Fixed costs such as equipment are virtually non-existent, unless you count computers; but with technology always advancing, those cannot really be counted as a fixed cost requiring constant upgrades. As for variable costs, that will be the same as well, labor (inspectors, paperwork processors), buildings & facility costs, traveling costs (to travel to each facility), and all of the other standard variable costs.
This organization will always generate short-run economic profits and will always generate long-run profits because it is the only organization of its kind. It also blocks any other type of organization entering the market because USA government has laws to protect
Cited: “Joint Commission Requirements.” Perspectives (2009): March 12, 2009. . “Joint Commission E-dition.” 2009 Accreditation Standards and Requirements From the Joint Commission (2009): March 12, 2009. . “Investopedia.” The Industry Handbook: Automobiles (2009): March 12, 2009. .