Download - Hospital RMP Final

8/7/2019 Hospital RMP Final

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Running Head: Hospital Risk Management Plan 1

Caribe HospitalRisk Management Plan

MBAProgram


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Hospital Risk Management Plan 2

Four elevators connect the 3 floors with one dedicated to patient movement from floor to floor. Four

stair case/emergency exits connect all floors and two have restricted access to the roof, and equipment

(Air conditioners, Fire equipment, Antennas, etc.).

The buildings have selective emergency fire systems located on all floors and outside buildings. Thelocation of the fire equipment is conspicuously marked with lit signage.

Twenty four hour Security personal stations are located at the emergency entries, near the main

entrance and next to each elevator entry on each floor. Additional security personnel are located near

the emergency admitting desk and cashiers window. Roving Security personnel make random tours

through the outside parking areas in marked vehicles and all security people carry radios with common

frequency channels set. A contract between the hospital and a private Security Firm requires the firm to

provide a set minimum of trained personnel. The Security firm must carry a liability insurance policy for

$1,500,000.00 naming the hospital as the coinsured. The hospital is directly connected to the local

police and fire departments for emergency needs.

There are four outer buildings. One houses emergency generators with their automatic switch and

battery requirements. A second building houses back up battery and electrical surge equipment for the

extensive Computer systems used by the hospital. The third building houses emergency food, water and

medical material that can only be used in a major emergency like a major hurricane. A rotation system

has been established to rotate date sensitive material from this building. The fourth building is a fire

proof building housing hospital records. Access to this building is restricted to authorized personnel

only. All records are kept on permanent records and stored in fire/waterproof containers inside this

building daily.

The Hospital is owned by the Caribe Government. It operates under the "Caribe Health Care ProvidersMalpractice Act". Under this act the Caribe Government procures a group policy for ALL Caribe Health

Care providers. The premiums are paid, in part, by the Caribe public funds. The Act also limits the

amount that an attorney can charge for the contingency fee, as well as the amount that can be paid to

the plaintive ($250,000.00 + medical fees) on winning the suit.

The risk management program of the Hospital is a component of the Hospital Administration. The CEO

and the Director of Risk Management and Insurance are responsible for the implementation and

operation of the hospital risk management program.

The Caribe Hospital has the following three pre-loss objectives:

1. To reduce the frequency and severity of injuries. This first objective involves the analysis of thecost of safety programs, insurance premium and cost associated with different techniques for

handling cost.

2. To provide a safe and healthy environment for patients, employees and visitors to assuresuperior health care. The second objective is to focus on the reduction of anxiety. Certain loss

exposure causes greater worry and fear for the stakeholders.


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3. To create employee awareness of their responsibility in attaining and preserving optimum safetyconditions. This third objective focuses on meeting any legal obligation. For example

government regulation may require that hospitals dispose of hazardous waste material

properly.

In an effort to accomplish the above three pre-loss objectives, the following major areas were identified

as possible risk exposures. These broad risk exposures are comprised of many other risk exposures at

varying frequencies and severities.

1. Property This risk exposure consist of all physical property such as building and equipment.2. Liability This risk exposure consist of any obligation that legally binds the hospital to settle a

debt or settle a wrongful act they have committed.

3. Business Income Any income that the Hospital realized as a result of business activity.4. Crime A harmful act committed or omitted in violation of a law that is punishable by fines and

imprisonment. A civil wrong or tort.

5. Employee Benefits Indirect and non- cash compensation paid to an employee. These includehealth and life insurance. Some benefits are mandated by law such as social security,

unemployment and workmen comp.

6. Market Reputation and Public Images The impression that the public have both real andimaginary of the short comings and or strength of the Hospital.

7. Government Laws and Regulations Specific guidelines prescribe by the government to theHospital industry on how to comply with its mandatory requirements.


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M

L

H

M

H

Property

1. Building2. Grounds3. Generators4. Inventory5. Records &

Computerfiles

L

L

L

L

L

Loss prevention and Commercial

Insurance

Loss prevention and insurance

Loss prevention and property

insurance

Loss prevention and Commercial

Insurance

Loss prevention and insurance

Business Income

Loss

1. Failure tocollect

Accts Rec

2. ImproperBilling

3. DisasterEvents

4. Failure toattract

patients

5.

Lack ofqualified

employees

L

L

H

L

H

Loss prevention and retention

Loss prevention, loss reduction,

retention

Loss prevention, loss reduction,

retention

Retention

Loss prevention and Insurance

TYPE OF LOSSLoss

Frequency

Loss

SeverityLoss Exposure Technique

L

L

L

L

L


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Crime Exposure

1. Theft2. Terrorism3. Medical

Billing

Fraud

4. Kidnap,Ransom

treat of

violence &extortion

Employee Benefit

Loss

1. Failure topay

employee

related

taxes

2. Failure tomaintain

contractual

obligations

3. Failure toprovide

adequate

working

conditions

4. WorkersCompensat

ion

Loss prevention, use

retention and insurance

Retention and loss

prevention

Loss prevention

Loss Control and Workers

Compensation Insurance

M

H

M

H

Loss prevention andretention

Loss reduction and Insurance

Loss prevention and

retention

Loss prevention

L

L

L

H

L

L

M

M

L

M

H

M


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Contamination

1. Food2. Bodily Fluid3. Environ-

mental

4. Infectiousdisease

M

H

H

H

Loss prevention

Loss prevention andinsurance

Loss prevention and

insurance

Liability

1. Mal Practice2. Falls3. Malfeasance

L

L

L

M

H

H

Loss prevention

Loss prevention

Loss prevention

M

H

M

Loss prevention, govt.

insurance

Loss prevention, govt.

insurance

M

H

L

M

L

L

M

Reputation & Public

Image

1. Properbackground

Check

2. Accreditation

3. Inadequateinventory

supplies


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Property

1. BuildingLow frequency, Medium severity, loss prevention, commercial insurance

Services offered include General Surgery, Medicine, Pediatrics, Obstetrics, Gynecology, Accident and

Emergency, Laboratory and Radiology. All of these services are housed in different buildings in one

complex that is interconnected by hallways and walkways.

The building complex has one main entrance for patients and visitors with several exits for each

building. The entire complex is fenced with wire mesh except the two entrances and exits. The security

of the building is important to the doctors, nurses, patients and their families, and visitors alike.

One of the measures the hospital can put in place to handle the risk of intruders inside the hospital

compound, is to include security guards at the facility 24 hours per day 7 days per week. Security

personnel can be part of the hospital staff or they can contract an independent security firm to handle

the physical security of the building.

Gang violence is now a menace to society around the world and Caribe hospital is no exception. Rival

gang members have entered the facility on several occasions to settle differences started on the streets.

This pattern of behavior puts the target patient, others patients, doctors, nurses, care givers and visitors

at great risk.

Security controls must be put in place to control the flow of persons in and out of wards; security guards

must be installed through the complex. Security personnel must also be screened during the hiring

process to make sure that they have no affiliations with gangs and must also be trained to identifypotential violators and intruders into the complex.

Fire is also a major risk to the building, knowing that the occupants of the building are sick and some

may not be able to move. Caribe Hospital is outfitted with state of the art equipment and modern

technology for medical screening and diagnostics.

Some of the preventative measures the Caribe hospital can put in place to protect the building and its

occupants are; Fire extinguishers must be installed in all the buildings on the complex according to

government regulations, regular maintenance checks must be done to each extinguisher according to

the manufactures manual; employees must be trained in first aid and fire and rescue techniques. All

exits and doors ways must be clearly marked and properly lit.

The entire hospital complex must be outfitted with a sprinkler system in the building so that in the event

of a fire break out, some electronic device can trigger a pump and also open valves to dampen the fire in

the building. A direct link must also be put in place to alert the fire station so that in the event of a fire

emergency, they can respond quickly to protect the building and its occupants. (Commercial Property

Insurance below)


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In order to prevent and reduce risk to patients, employees and visitors alike, Caribe hospital must

maintain its facilities; as a result providing a high quality of service to customers it is important that the

hospital maintain the physical facilities. A fulltime building maintenance crew must be given detailed

responsibilities to maintain the existing physical structure; ceiling fans, paint walls, wall paintings, roof

leakages, and repair broken doors and windows to maintain the structure. They are also responsible for

electrical maintenance such as television sets, light bulbs, switches, wall outlets, ceiling fans and air

Conditioning & heating units.

Risk prevention technique to help the hospital minimize these risks should include employee training in

building and maintenance repair. New and current works must meet the state certified requirements for

personnel performing these duties.

Product and licensing documents must be keep in a safe place, operating procedures must be clear and

available to all users and maintenance staff.

Workmans compensation insurance policy can help minimize the impact of the risk of one of these

work men or women getting hurt on the job (Rejda, 2011). Commercial liability insurance policy would

be able to cover damages to patients and visitors.

2. GroundsLow frequency, low severity, Loss prevention

The hospital has a main parking lot at the front of the complex where visitors and patients alike can park

their vehicles. There are manicured lawns in and around the entire complex with a permanent

maintenance crew to care for the grounds.

To help prevent the risk of physical damages or contamination to workers, patients and visitors, garbage

cans must be placed in positions where customers can have easy access to dump their waste with clearly

marked signs indicating that this is a waste disposal area. A secure lid must be placed on the garbage

collection container so that the waste can be safely protected.

The hospital has had a mandatory training program for many years on environmental safety to all staff

so that they are better educated about handling what is in and around the hospital compound. Training

must be attended by all staff every 90 days. Anyone missing a training session must take a make-up

session at the next possible training session.

There are clearly marked signs to show directions, and access to services, such as; emergency, parking

lots, main entrances, traffic flow, exits, and pedestrian crossings.

Foot paths, wheel chair ramps, walkways, driveways and outside stairways must be clean and clear at all

times. Employees, patients and customers should have free and easy access to the entire facility without

any fear of danger. In the event that you have liquid spills or water leakage in these entrance and exit

paths there should be clearly mark signs indicating that users should take preventative care when in

these areas.


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In the event of an emergency, all access roads to the emergency room must remain clear at all times,

with bold and clear NO PARKING signs erected in those areas to avoid illegal parking by patients and

visitors. The roving security persons should call a towing truck to remove the offending vehicle.

The entire grounds should be lit at night with flood lights erected around the entire complex. The floodlights must have a light sensor so that they turn on when the day light fades away and turn off when the

day dawns. This will not only save energy but also prevent human error such as a maintenance

personnel forgetting to turn the light on at night and off during the day.

There is a free healthcare plan for all grounds personnel, to ensure that they are treated in the event

they are exposed to contaminants on the complex premises while performing their duties.

The risk management technique Caribe hospital can use to handle the indentified risk is a building and

personal property coverage form. According to Rejda, this form of insurance covers the buildings

described in the declarations and includes any completed additions and fixtures and permanently

installed machinery and equipment. Certain outdoor fixtures are also covered such as light poles, and

equipment used to maintain the building such as fire-extinguishing canisters.

The hospital parking lot is a very active area at Caribe hospital and as a result lots of attention and

security must be given to that area. In order to minimize the risk of theft and property damages,

patients and visitors should not be allowed to leave their vehicles on the hospital grounds over night. If

you're going to be in the hospital for a period of time, patients should arrange for a friend or relative to

drive their vehicle home. To maximize the use of the parking space and reduce security threats to the

vehicles in the parking lot overnight, vehicle spaces should be clearly marked including disability parking

and essential staff such as doctors, nurses and hospital administrators. This type of management of the

parking lot will avoid essential personnel from not getting quick and easy access to the facility in the

case of emergency. Motorways and parking lots at the hospital should also include (risk management);

Maximum speed limit on the grounds of the hospital is 5 mph.

Vehicular sound systems must be kept to a minimum.

Loud blowing of vehicular horns is prohibited.

Pedestrian crossings must be clearly marked

The Hospital Commercial Package Policy would help to minimize the loss, theft or vandalism to vehicles

in the parking lot. To cover all grounds the hospital can also add the Causes-of-Loss Special Form to

insure against risks of direct physical loss. That is that all direct physical damage losses are insured

unless specifically excluded or limited in the form itself. This will include vehicles and personal property.

3. GeneratorsLow frequency, High severity, Loss prevention, property insurance

At Caribe Hospital both the facility and oxygen generators are located within the hospital grounds. These

generators are mainly used when the islands electricity service is down. This unit poses very high risks to


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persons in the event that it or any if its components fail. Oxygen and Diesel leaks may promote fires,

whilst pressurized gas leaks pose a risk of injury to exposed persons.

In the event of a unit malfunction or failure the persons in the vicinity of the fault may be at risk. If a fire

is generated then all persons in the immediate area of the fire may be at risk.

Caribe hospital management can enforce procedures to help avoid these risks. The generator and its

ancillary components must be serviced and inspected on a regular basis, every 7 days, by a competent

service provider.

As a part of proper operating procedure, in the event that any malfunction is observed in the unit then it

must be shut down immediately. A backup generator should be considered in such an environment.

Only persons approved by the Hospital Manager may interfere with/operate the unit and should be in

the area of the generator.

Loss reduction is a good strategy that is used by the hospital to help neutralize this type of risk. Business

Personal Property insurance is usually covered under the Hospital Commercial Package Policy or in the

case of Caribe, a government insurance policy that has the same similarities (Rejda, 2011). The Hospital

generators will fall under this coverage. To cover all grounds the hospital can also add the Causes-of-

Loss Special Form to insure against risks of direct physical loss, that is that all direct physical damage

losses are insured unless specifically excluded or limited in the form itself. This will include generators

and the inventory loss due to a fire or other related losses to the generators malfunctioning.

4. InventoryLow frequency, Medium severity, Loss prevention, Commercial insurance

Inventory control is very important to the financial success of any business. Caribe Public Hospital carries

a huge range of inventory that falls in the medical & surgical supplies category for each of its 17

specialties. The cost for these supplies can range from a few cents to thousands of dollars. The hospital

has chosen to implement loss prevention strategies such as a secure storage area and limited access to

authorized personnel only who must maintain logs of inventory movement.

Other preventative measures the hospital can take to control loss in this area are to have periodic

physical counts of the inventory to verify the accuracy of the inventory records. If variances are found

they should be investigated to determine their cause. Another possible area of concern that could be

material enough is the tracking of return items such as expired drugs that are reimbursable to the

hospital. Internal records of the name, quantity and value of expired drugs should be maintained andverified against credits and or refunds.

Loss reduction is another strategy that is used by the hospital to help counteract this type of risk.

Business Personal Property insurance is usually covered under the Hospital Commercial Package Policy

or in the case of Caribe, a government insurance policy that has the same similarities. The Hospital

inventory will fall under this coverage. To cover all grounds the hospital can also add the Causes-of-Loss

Special Form to insure against risks of direct physical loss. That is that all direct physical damage losses


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are insured unless specifically excluded or limited in the form itself. This will include inventory loss due

to fire, flood, windstorm, fallen objects and vandalism just to mention a few.

5. Records and computer filesLow frequency , high severity, loss prevention and insurance

As improvements in medicine take place, the various risks also change. A major area of risk involves the

record keeping and computer system security for the hospital. In recognition of this, the hospital has a

secure building that houses the computer servers, switching and wiring elements. Back-up surge

protectors and battery systems are also housed in this restricted access building. Only authorized

technicians and maintenance personnel are allowed access to this building. Signs stating Restricted

Access, authorized personnel only are placed on all four sides of the building. Attempted entries by

unauthorized people are subject to immediate dismissal and are referred to the risk manager for

correctional action. The building is protected from fire with an inert gas automatically activated system.

This system displaces oxygen suppressing the fire but not causing damage to the equipment, not

damaged by the fire. Backup systems are in place so immediate change over can be effected. Recently

the hospital has divided the computers into two separated systems. The patient treatment computers

and record keeping software are autonomous and are not connected to any outside computer system,

or the internet. The software for this system is produced by a firm that provides the same system to

many hospitals. There is a firewall software in place making it very difficult for hackers to penetrate the

system. The second system is connected to the web and only authorized people are allowed to use

these computers. Access requires a secure name and password by the user. Any unauthorized attempt

to use these computers activates an alarm to the supervisor of security and identifies the computer

station. The supervisor must send a guard to investigate and identify the attempted user. If the user is

not authorized the guard is to escort that person to the supervisor, who will contact the administrative

manager on duty to make a decision on the proper action to be taken. If any indication of any type of

infection to the system is discovered the system technician is immediately contacted to check and

correct the problem. These systems are being monitored on a continuous basis and strict maintenance is

performed every 48 hours.

Business Income Loss

1. Failure to collect Accts ReceivableLow frequency, low severity, use loss prevention, retention

This is not something that happens often. The hospital does have outstanding monies that need to be

collected but because of the type of institution that the hospital represents, they are able to get monies

from patients and other entities rather quickly. Hospitals recover most of their monies for patients from

the insurance companies. Most of the work that is done on the hospital grounds are services that are

rendered towards the client. Once the patient has received treatment for his/her illness, they are free to

leave, after payment has been rendered.


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Loss prevention is used here in this case because the hospital staff is able to check for if the patient has

valid insurance before rendering any services. This mandatory principle is in place for all people who

enter the hospital premises requiring services. Because staff, are able to check for insurance, they are

contributing to lowering the rate of accounts receivables. The risk financing method that has been put in

place is that of retention and this is because the hospital is aware that some patients come into the

hospital without insurance or available funds and the hospital has decided to take on an active retention

method by ensuring that all clients get service, but that they also pay for the services rendered. Current

net income is used to adjust for any balance and offsets in the financial statements. As this is a publicly

owned hospital anyone coming in must be treated with or without insurance. Of course cash is always

good. The hospital has to set up some type of payment schedule for payment for those that cant pay.

Some homeless, welfare and elderly will not be able to pay so that cost will have to be absorbed as a

cost of doing business. This happens fairly often.

2. Improper BillingLow frequency, low severity, loss prevention and loss reduction, use retention.

All of the departments of a hospital have to work together. The finance department and every area that

trickles down from the finance department are very important to the structure of the organization.

When a patient gets admitted to the hospital, they are processed and all billing information is gathered.

This information is sent to the finance department for proper review. Financial data software are in

place on the financing departments computer systems to make sure that information is calculated

correctly and there is less error involved. All bills are then sent to the insurance companies and clients

for collection of payments. There are human errors and it is not unknown for a computer to have a

glitch and improper bills are printed. The hospitals financing office has trained accountants to pick up on

these errors so that there are less mistakes. All bills are reviewed and are corrected of errors. This is a

loss prevention technique that has been implemented alongside the use of the financial software to

organize the bills a lot better. The hospital has also implemented a loss reduction technique so that

when and if improper billing does occur, there is a policy in place to correct this issue. In such a case,

accountants have been trained to deal with the matter in a quick and professional manner. The hospital

does not want to get sued for billing a client too much and also the hospital does not want to lose

money for billing a client too little. The hospital has taken an active retention approach to this situation

as they aware that improper billing does occur and they do not want it to become part of the

organizational culture. In the case of paying off these improper billing cycles, the hospitals financing

department uses current net income to offset for the balance in the billing cycles.

3. Disaster EventsLow frequency, high severity, loss prevention and loss reduction, use insurance.

A disaster event could be any type of disaster, not just a natural disaster. If a natural disaster were to

take place such as a hurricane, the hospital has emergency staff-on call that are trained in such

emergencies on how to handle multiple situations at the same time. The hospital also has back-up

generators for all buildings and rooms on the premises. The use of these back-up generators and


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systems, have been put into place to prevent and reduce the loss of life after a natural disaster

occurrence. Other disasters may also take place in the hospital, which are not natural, such as a

radiation leak or an outbreak of a virus. Measures that have been put into place for these circumstances

include protective gear and trained professionals who have been instructed on how to deal with this

dilemma. If these issues were to arise, measures have been taken on how to evacuate the building and

surrounding neighborhood safely away from the contaminated zone. The hospital does have multiple

insurance policies to cover for disasters such as property insurance, liability insurance to cover for

accidents that patients may incur and commercial insurance. The hospital has a captive insurer set up so

that over the years they have been sowing money into this parent insurance account in the event that a

major disaster does occur, they are covered with enough funds to manage the losses and be fully

indemnified. In the case of a disaster event, FEMA is also called upon to provide much needed

assistance. As this is government owned, the government would use disaster funds, equipment supplys,

etc.

4. Failure to Attract PatientsLow frequency, low severity, use retention

Because this hospital is so well known for its services and superb medical treatment, it attracts many

patients from all over the country that visit the premises for medical services. It is a bit difficult for the

hospital to fail to attract patients. In the event that the hospitals reputation and public image has been

tarnished, the hospital management has advertising campaigns and measures in place to ensure

patients and the public that the hospital strives to the best in excellence. The hospital staff,

management and board have taken a very active approach to this situation as they are fully aware of the

consequences of losing patients due to malfeasance, malpractice and poor reputation. To reduce the

losses, the hospital staff helps to build back the image of the hospital by advertising on television, radio,

newspapers and flyers. The hospital board understands that if they lose patients, they will reduce

income levels. If this does occur, the board is fully aware that they will have to retain some of the losses.

The Caribe hospital has a spokesperson, Sam Topple, who is on the radio every day and he has the

ability to spin the reputation of the hospital in the best way.

5. Lack of qualified employeesLow frequency, high severity, use insurance. Loss prevention

The hospital strives to have staff members whom are well trained for any situation, especially as it has

to deal with the care of many patients. As with any other hospital, this hospital has a few preventative

measures in place so that all members of the medical team are well trained and up to par with all the

latest innovations, techniques and treatments. The medical team has to go through grueling training

classes and assessments every year to ensure that they are properly educated on their specific field. Of

course, before being accepted into the program, all staff are required to have a medical degree and

license in order to practice and treat patients and this is strictly enforced. Quarterly assessments are

given to all staff to ensure that they are aware of all the practices and medicinal treatments of the


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hospital. Any of the medical staff that is found lacking knowledge or are not practicing good medical

attention are then reprimanded of their duties until further notice. In the event that there is an issue in

which the medical staff has rendered poor service or service that is not compliant with the medical

industry, stricter measures are enforced. In the case of wrong medications being administered or

medical equipment being left inside a patients body, liability malpractice insurance will provide the

monies that are needed to correct this problem after the hospital goes through a long and strenuous

court case. The low cost of government malpractice insurance all medical staff get, may be a good

selling point to get employees to come to Caribe Island.

Crime Exposure

1. TheftLow frequency, medium severity, use loss prevention and retention

The hospital management knows that there will be theft of items on the premises. There is theft at allorganizations worldwide and it is an ongoing problem. The hospital has many products, small and large

that many people would like to have. Items that are frequently stolen are smaller items such as

bandages, medical supplies, medications and office supplies. The hospital knows that there will be some

sort of shrinkage and this has already been considered as an absorption cost in the financial statement.

The hospital has implemented security surveillance systems around the premises as to deter staff or

patients from stealing products. The medications are stored in locked cabinets and can only be accessed

by authorized medical personnel. The larger products are a bit more difficult to steal but the hospital

has tamper resistant devices on these larger products (i.e. chairs, tables, etc.) Because the hospital

management knows that there will be shrinkage, they have taken an active retention approach to and

do account for this on their financial statement as a expense which is deducted from current netincome.

2. TerrorismMedium Frequency, high severity, use loss reduction, insurance.

In the times that we live in currently, there is always the threat of terrorist attacks and being a hospital

with many patients and people always coming and going, the hospital is a target for a terrorist attack,

whether it is from an international or domestic threat. The hospital has a lot of important machinery

and equipment that is a potential target of a terrorist threat. Terrorism to our facility can stem from

someone wanting to damage our facility with the use of weapons or it can also stem from hijacking thefacility. Of course, if something were to go wrong, there is a safety evacuationplan in place with the

federal and local government to escort the people in the hospital to safety. If anyone was injured or hurt

in the event of a terrorist attack, the hospital does have liability insurance to cover the injured party.

The hospital also has property insurance in place to cover for any damages that the hospital may incur.

In times of terrorist attacks, the claims and expense can get very high so the hospital does have a

government captive insurer set up for these types of claims.


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3. Medical Billing Fraud/Misappropriation ofFundsHigh Frequency, Medium Severity, loss prevention, retention

Fraud is going to occur whether you like it or not. It is unfortunate that it happens but it does and it is a

big part of theft. It is unavoidable. In a case like this the hospital has computerized systems that keep

track of all revenue that is coming in and going out. It is possible for the accounting and financing

department to dummy up the numbers so that they can pocket some extra monies for themselves. The

Sarbanes-Oxley Act is in place to prevent situations like this from occurring. The hospital also has set up

the billing so that it is double checked by an outside agency for accuracy. If there is fraud that occurs in

the medical billing department, the hospital has decided to retain some of the losses because from past

experiences they know how much money will be lost. They will pursue the culprit in a legal battle to win

back the losses. The hospital may also be billed inappropriately for medical expenses from their

suppliers and other third parties. In cases like this, the hospital will use the same computerized system

to make sure that they are billed efficiently and without mishaps.

4. Kidnap, Ransom, treats of violence and extortion attemptsMedium frequency, High severity, loss prevention

Growing concerns about the safety of gunshot and stabbing victims being admitted to the emergency

room have required new methods mitigating this danger and have required the hospital and local law

enforcement personnel to collaborate on developing a plan reducing the risk. At the report of a

shooting, the emergency ambulance and police are dispatched to the scene. On recovery of the victim,

EMT personnel apply first aid and accompanied by a police team return to the emergency room. While

returning the EMT team advises the Emergency room of the extent of the wound and condition of the

victim, so emergency personnel can make preparations for receiving the patient and start immediate

treatment. The police escort and EMT personnel transfer the patient inside the emergency room and to

a secure area where guards can protect all personnel and the patient. The police stand guard outside

the ER until it is clear that no pursuit is taking place in the near future. If required the patient is

transferred to the intensive care area and is accompanied by security personnel. Guards will standby

until it is determined that the patient is secured in the hospital. This procedure is being followed and is

under constant evaluation to determine if a better plan can be devised.

A contract firm should be retained to provide 2 armed guards at the emergency entry, 24hrs per day, 7

days per week. The hospital has had contract security for many years. All reports of failure to perform

duties as required are reviewed each day with the security firm and written action reports are required

to be returned to the Hospital Risk Manager within 24 hours. The risk manager must make any

adjustments required as soon as possible.

1 armed guard at the cashiers area, 24hrs per day, and 7 days per week. These armed guards must have

all required firearm permits, and be trained in the safe use of the firearm. Strict adherence to the

hospital standards for use of force in conducting their duties must be followed.


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There should be 1 unarmed guard at each of the following areas; Main entrance, Rear entrance,

Reception area, by the Elevator entrance on each floor and the Prescription drug storage area.

There should be 1 guard to make random tours of the outside of the building and parking areas. The

tours should be made at random times to prevent someone from being able to discern routines and planaround them. These outside tours should be made in a security vehicle equipped with two way radio,

flashing lights and loud speaker.

There should be 1 supervisory guard for each shift, with clear responsibility, to instruct and assist where

necessary with any guard position. This Supervisor must maintain accurate records of all guards

including time on station and station location. The supervisor must make the rounds of all guard stations

at periodic times to check on awareness and diligence of the guards.

Alarms should be located in key positions, emergency entry, cashiers window, and any other location

the hospital staff suggest, to alert the supervisor and go directly to the police and fire stations in the

advent of an emergency situation occurs.

All Guards must be equipped with two way handheld radios. A charging facility with spare batteries

should be in the supervisors office at all times.

At night when administrative offices are normally closed a guard should make tours to prevent break-in

and theft.

The contract with the Security firm should have a requirement that they provide a liability insurance

policy for $1,000,000.00 with the hospital named as coinsured in the advent their employee(s) fail to

provide the level of security agreed on. Training and retraining for all Security personnel must take place

every 90 days

Employee Benefit Loss

1. Failure to pay employee related taxesLow frequency, low severity, loss prevention, use retention and insurance

This situation rarely happens, as the hospital wants to make sure that they do not have any issues that

damage their reputation. Again, the financing department makes certain through using computerized

systems and advanced software that all payments are made to cover employee related taxes. All

payments are made to the government in a timely manner. In the case that employee related taxes arenot paid, then the hospital will need legal counsel to sift through the documents and attend the

necessary cases. In this instance, commercial insurance is used to pay for the legal obligations. In the

case that the hospital loses the case or is drawn into a legal battle, they will retain part of the loss. They

will get these funds from a funded reserve that they keep aside for situations that may occur.


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2. Failure to maintain contractual obligationsLow frequency, low severity, retention, loss prevention

This is a situation that the hospital is rarely faced with. Again, the hospital would like to maintain its

reputation so it ensures that all contractual obligations are met such as paying specialists on contract.

The hospital also ensures that it pays all their medical suppliers in a timely fashion. This is done again

through the accounting and financing department. The hospital uses its current net income to pay for all

contractual obligations as this is an incurred expense.

3. Failure to provide adequate working conditionsLow frequency, medium severity, loss prevention

The hospital strives to maintain a clean and safe working environment for its patients and staff. The

hospital staff is continuously being sent surveys to get feedback on any areas of the hospital that are not

up to standard. The hospital is also inspected weekly by an outside government agency to ensure that all

working areas are up to standard and that all working conditions meet standard specifications. In the

case that the hospital fails to provide adequate working conditions, according to a disgruntled

employee, measures will be taken to enhance working conditions immediately. If the employee(s) are

still unhappy with their working conditions, the hospital may be taken to court and in this case, business

income insurance will be used to pay for the legal battle.

4. Work CompensationHigh Frequency, Medium Severity, Loss control and Work Compensation Insurance.

The risk of Workers Compensation for hospital workers is lurking around every corner. The nature of this

business constantly exposes employees to risk of becoming injured or ill. This risk is high frequency and

high severity. The best risk management techniques for this type of risk exposure are loss control,

retention and insurance.

Under the loss control technique the hospital can reduce workers compensation claims by practicing

good hiring procedures. References should be checked, and pre-employment physicals should be done

to include a range of motion testing for clumsiness. This will establish a baseline of physical abilities and

reduce fraudulent injury cases. Drug tests should also be administered.

Employee training is essential and should be conducted in areas like infection control procedures, lifting

and patient transfer procedures, sharp injury prevention, fire safety, emergency action, good

housekeeping and general safety. In the hub article Reduce workers compensation insurance Carol

Rossie wrote about the following two risk management technique that can be included as a retention

strategy. This includes the creation of an Employee Health Department. Employees who are injured are

encouraged to go through the EHD if they are injured at work. One benefit of this department is that the

hospital has the opportunity to investigate the underlying problems that may be contributing to injuries

or impeding the injured recovery. The second retention strategy was to establish a return to work


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program. The focus of this program is to return workers to work quickly and safely through programs

that encourages psychological and physical healing. The insurance used to manage this type of risk

management are Workers Compensation insurance and liability insurance. Workers Compensation is

government regulated as it is a requirement of doing business for the hospital. Liability insurance should

be a part of the hospital risk management plan and should encompass possible liability for law suit that

are work related.

Contamination

Contamination is another risk that the hospital has to face. The hospital has certain measures in place

that assist in alleviating and minimizing this type of loss. The occurrences are low but the severity can be

very high in that persons can be seriously injured or die. We will briefly talk about three types of

contamination that the hospital faces.

1. Food contaminationMedium frequency , Medium severity, Loss prevention

Food contamination is usually caused by certain types of bacteria and viruses. Some of the most

common bacteria and viruses are Salmonella, Staphylococci and E. Coli. Contamination of this type is

prevented by enforcing simple rules such as always washing hands thoroughly before handling food,

washing hands after using the toilet, requiring food to be cooked thoroughly, not serving food made

from any raw uncooked meat or dairy products, washing produce thoroughly before serving and

avoiding foods that tend to have high allergic reactions in people, such as peanuts and shellfish.

To minimize this loss for the hospital the hospital has chosen to transfer the risk by contracting another

company to operate the cafeteria in the Hospital. The cafeteria at the hospital currently provides food

for patients, staff and visitors. In the contract the hospital requires the cafeteria to carry liability

insurance of at least 1.5 million and property insurance for 1 million naming the hospital as coinsured.

The hospital also requires that the cafeteria have a licensed dietician on staff at all times.

2. Bodily fluid contamination

Low frequency, High severity, loss prevention, insurance

Bodily Fluid contamination is also a real risk for the hospital. Bodily fluid contamination is where blood

borne viruses such as Hepatitis B, Hepatitis C and HIV infect a healthy individual through an object such

as a needle that was used on an infected person. Loss prevention measures are taken to control this risk.

The hospital has a strict policy and procedure regarding the handling and disposing of used needles.

Needles should be disposed of immediately in specially marked BIO_HAZARD Bags and not by a

secondary party. Any incident should be reported immediately for diagnosis and treatment to minimize

the extent of contamination.


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3. Environmental contamination

Low frequency, High severity, loss prevention, insurance

The hospital also has environmental contamination to consider because it produces large amounts of

potentially infectious, bio-hazardous and hazardous chemical wastes in the form of human tissue,

contaminated needles and soiled linens. For this risk the hospital should implement a medical waste

handling procedures that meets the requirement of OSHA. Employees should wear appropriate

protective equipment such as glasses, mask and gloves. All waste is to be treated as hazardous if they

are not separated and labeled.Disposal of waste such as urine, vomit and excrement should be carefully

poured into the toilet, however toxic materials such as mercury and radioactive material cannot be

poured into the sewer system and must be disposed of by other approved means according to

government regulations. These policies and procedures once fully implemented should reduce the

hospital environmental pollution insurance cost.

4. Infectious disease

Medium frequency, High severity, loss prevention

Patients with infectious diseases are a very high priority and very strict handling of these patients is

mandatory. At first knowledge of the patient having a communicable disease, the patient must be

transferred to an isolated area by trained personnel, using all equipment and personal protection

equipment. The hospital has for many years had a succession of procedures for the proper handling of

these patients. As new treatment, methods and equipments have been developed, the hospital

management has had to change risk procedures and training to envelope the latest technology.

Constant training of the special disease health care personnel at any time, to accommodate the new

procedures is followed. All forms reporting to the Proper government entity must be reviewed and any

changes made requiring retraining of personnel must be instituted.

Reputation and Public Image

1. Proper back ground check of new hire

Low frequency, Medium severity, Loss prevention

The reputation and public image of the hospital is closely linked to the doctors, nurses and other

employees the hospital have on staff. This makes the employees of the hospital a crucial asset or

liability. With that said proper background checks of new hires is very important and is used to filter

applicants that do not have the right credentials, may be accident prone and or have substance abuse

problems. By requiring background checks of new hires the hospital is using loss prevention as its

management technique to avoid hiring high risk employees who are more likely to expose the hospital

to the above risk. This risk is medium frequency and high severity.


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2. AccreditationLow frequency, High severity, loss prevention

Hospitals are subject to certain regulations and standards such as OSHA and requirements for

accreditation. A negative report from one of these organizations can have a severe impact on the

hospital reputation and image. Often included in these regulations and requirements are sanitation

standards that must be met. Policy and procedures in place for sanitation standards such as washing

your hands after using the toilet, discarding needle(s) immediately, handling the hospital laundry and

other housekeeping tasks are just some of the loss controls implemented at the hospital to ensure

proper sanitation is maintained through the hospital. Staff members have been trained and are

subjected to retraining every 60 days in proper sanitation methods. Records are maintained to assure

each member of the staff undergoes the most current training.

3. Inadequate inventory

Low frequency, High severity, Loss prevention

Inadequate inventory of critical supplies is bad for the hospitals public image and reputation. The

hospital will not attract new patients if it is known to run out of critical supplies. This occurrence can

cause serious complications or even death of patients. To control this risk the hospital has in place an

inventory management system that notifies inventory staff of minimum level requirements of inventory

items. The staff is trained to follow procedures of immediately recording items that go in and out of the

inventory stock room. This will ensure inventory record accuracy. Cycle counts are done on a weekly

basis on all critical items. In case of emergencies inventory personnel is well trained and knowledgeable

of any substitute that can be prescribed. Risk is low and severity is high.

Liability

1. MalpracticeMedium Frequency, Medium Severity, Loss prevention , Government Insurance

Medical Malpractice is improper, unskilled, or negligent treatment of a patient by a physician, dentist,

nurse, pharmacist, or other health care professional.

According to Wests Encyclopedia of American Law, Physicians and other health care professionals maybe held liable for their failure to exercise the ordinary care a reasonably prudent qualified person would

exercise under the same or similar circumstances. Negligence is the predominant theory of liability

concerning allegations of medical malpractice, making this type of litigation part of tort law. Since the

1970s medical malpractice has been a controversial social issue. Physicians have complained about the

large number of malpractice suits and have urged legal reforms to curb large damage awards, whereas

tort attorneys have argued that negligence suits are an effective way of compensating victims of

negligence and of policing the medical profession.


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A person who alleges negligent medical malpractice must prove four elements: (1) a duty of care was

owed by the physician; (2) the physician violated the applicable standard of care; (3) the person suffered

a compensable injury; and (4) the injury was caused in fact and proximately caused by the substandard

conduct. The burden of proving these elements is on the plaintiff in a malpractice lawsuit.

Physicians, as professionals, owe a duty of care to those who seek their treatment. This element is rarely

an issue in malpractice litigation, because once a doctor agrees to treat a patient, he or she has a

professional duty to provide competent care. The plaintiff must show some actual, compensable injury

that is the result of the alleged negligent care. Proof of injury can include the physical effects of the

treatment performed by the physician, but it can also include emotional effects. The amount of

compensation at issue is usually a highly contested part of the litigation. Causation may also be a

vigorously litigated issue because a physician may allege that the injuries were caused by physical

factors unrelated to the allegedly negligent medical treatment. For example, assume that a physician is

sued for the negligent prescription of a drug to a patient with coronary artery disease and that the

patient died of a heart attack. The plaintiff's estate cannot recover damages for the heart attack unless

there is sufficient proof to show that the medication was a contributing cause.

Many states have enacted damage award limits that are intended to limit the amount of recovery for

noneconomic losses, such as pain and suffering, and punitive damages. Plaintiffs attorneys have

contested these changes, arguing that medical malpractice awards account for only one percent of the

total yearly national health care expenditures. In addition, they note that malpractice claims are the only

effective tool to identify incompetent physicians because the medical profession has refused to

aggressively discipline its members.

The critical element is standard of care, which is concerned with the type of medical care that aphysician is expected to provide. Until the 1960s the standard of care was traditionally regarded as the

customary or usual practice of members of the profession. This standard was referred to as the "locality

rule," because it recognized the custom within a particular geographic area. This rule was criticized for

its potential to protect a low standard of care as long as it was embraced by the local medical

community. The locality rule also was seen as a disincentive for the medical community to adopt better

practices.

Most states have modified the locality rule to include both an evaluation of the customary practices of

local physicians and an examination of national medical standards. Physicians are called to testify as

expert witnesses by both sides in medical malpractice trials because the jury is not familiar with theintricacies of medicine. Standards established by medical specialty organizations, such as the American

College of Obstetricians and Gynecologists, are often used by these expert witnesses to address the

alleged negligent actions of a physician who practices in that specialty. Nonconformance to these

standards is evidence of negligence, whereas conformance supports a finding of due care.

Other rules govern the standard of care evaluation. A few states apply the "respectable minority rule" in

evaluating a physician's conduct. This rule holds that a physician is not negligent merely by electing to


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pursue one of several recognized courses of treatment. Some states use the "error in judgment rule."

This principle exempts a physician from liability if the malpractice is based on the physician's error in

judgment in choosing among different methods of treatment or in diagnosing a condition.

The Caribe Government Health Care Providers Malpractice Act: covers the hospital with a Governmentprocured group policy for all Caribe Health care providers, the premiums of which are paid, in part, by

public funds. All government health care employees are covered by this policy as part of their

employment agreement. Independent health care providers working for the government, that also have

private practice pay half of the premium for their specialty. The Act limits the amount of the maximum

malpractice claim to $250,000.00 and limits the amount of an attorneys contingent fee. The Caribe

code follows the Virgin Islands Code 33 Ann 3409 section 166a, 166i(b), 166i(c) 166i(d). The Caribe

Hospital has about 10 malpractice suits filed per year on average.

2. FallsHigh frequency, High severity, Loss prevention, Gov insurance

Slips, trips and falls are the most common risk due mainly to patients underlying medical condition and

frailness. These incidents are usually associated with adverse outcomes such as injury, complaints and

litigations. This makes falls and related injuries a major risk for the Hospital and should be included in its

risk management plan.

Although classified under malpractice it is worth noting that falls at times does not mean that the

Hospital is at fault or is giving poor quality service. Some falls are unpredictable and inevitable while

others are avoidable and unacceptable. For the sake of treatment, rehabilitation and patients

independence the company must weigh these against the proposed fall prevention policy.

The elderly are most susceptible to falls because they are usually frail and have multiple disabilities.

Isolated falls usually occur among younger persons. These falls may be attributed to trip hazards,

fainting, blackouts or temporary confusion/agitation due to acute medical illness.

The risk techniques that are being used to manage this type of risk are Loss prevention and loss

reduction. This is accomplished by the hospital installation of hand rails in bathrooms, next to beds and

having aid available to assist patients at all possible times. There are eighteen handicapped parking

spaces available close to the entrance of the building. The emergency treatment area has loading and

unloading ramps for ambulance delivery of patients and the parking area and the hospital is well lit.Installed next to the patients bed and in the bathrooms are panic buttons. The halls are continuously

monitored by the staff on duty using hallway and room surveillance cameras. This type of risk is covered

under the hospital commercial liability policy under malpractice. The hospital retains a small portion of

this risk through its deductible on its liability policy.


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3. MalfeasanceLow frequency, medium severity, loss prevention and insurance

According to Wests Encyclopedia of American Law, Malfeasance is the commission of an act that isunequivocally illegal or completely wrongful.

Malfeasance is a comprehensive term used in both civil and criminal law to describe any act that is

wrongful. It is not a distinct crime or tort, but may be used generally to describe any act that is criminal

or that is wrongful and gives rise to, or somehow contributes to, the injury of another person.

Malfeasance is an affirmative act that is illegal or wrongful. In tort law it is distinct from misfeasance,

which is an act that is not illegal but is improperly performed. It is also distinct from nonfeasance, which

is a failure to act which results in injury.

The distinctions between malfeasance, misfeasance, and nonfeasance have little effect on tort law.

Whether a claim of injury is for one or the other, the plaintiff must prove that the defendant owed a

duty of care, that the duty was breached in some way, and that the breach caused injury to the plaintiff.

One exception is that under the law of strict liability, the plaintiff need not show the absence of due

care. The law of strict l iability usually is applied to product liability cases, where a manufacturer can be

held liable for harm done by a product that was harmful when it was placed on the market. In such cases

the plaintiff need not show any actual malfeasance on the part of the manufacturer. A mistake is

enough to create liability because the law implies that for the sake of public safety, a manufacturer

warrants a product's safety when it offers the product for sale.

Implement & Monitor Risk Management Program

The Goal of the risk management plan is to maintain the highest level of health care for the population

of the Caribe Island. The objective of the plan is to identify all areas of risk and to minimize them as

much as humanly possible. Risk management for a hospital must be done prior to the risk actually

occurring. The lives and wellness of the patients of the Caribe hospital cannot be replaced with

insurance. Mitigation of all risk requires constant review, by all elements of the hospital and the policy

of top management must matriculate down to all department heads. From the department heads down

to every worker in the hospital, they all become responsible for maintaining risk management plans in

every detail. The hospital Risk Manager takes the role of day to day review of hospital operations and

coordinates with all department heads, to truly manage risk.

The Hospital is operated as a group of departments. Each department is autonomous but out of

necessity each department must interact with all other departments. The method to achieve this goal is

to require every department to develop a risk assessment for their department and then develop

mitigation procedures for each risk. The department head managers then meet as a group and

determine the best way to merge these procedures in a seamless greater risk management plan.


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As human illness is treated by humans, the possibility exists for human errors. Absolute commitment by

all management personnel, from the CEO down to the department heads and then down to every health

care worker must be constantly emphasized and monitored. Daily reviews of any breach of health care

must be reported and remedies arrived at that will eliminate the repetition of the error. Required

reports to the government entities must be made on the same day they are required, and this

procedure must be monitored. Any breach of the risk management plan must be reported at the first

recognition of the transgression. Weekly reviews of the plans effectiveness are carried out by members

of a select group of health professionals and hospital management. While mitigation is the primary risk

management process to affect loss prevention and loss reduction, captive insurance by the Caribe

Government is utilized to provide expedient treatment of loss claims. Contract mitigation with food and

security firms also provides additional levels of insurance and encourages the contractors to maintain

the highest level of service.

The role of the hospital management in developing a plan for the aftermath of a major risk loss like a

hurricane, prior to the loss occurring, will determine how effective the hospital will be able to resumetreatment of patients. The hospital risk manager reviews the level of preparedness and strives to keep

all departments in a constant state of readiness for that major loss event. Lines of communication with

other government agencies like water, power, sanitation, police, fire and emergency response must be

established as part of this plan, and periodic tests of the response level from those agencies carried out

every 90 days. Training between the hospital staff and those of the other agencies will be conducted at

the 90 day test and managers from all agencies and hospital staff examined for efficiency and any

corrective measures taken immediately by this team of managers.

Part of the risk management plan relies on detailed review from outside sources. These reviews must be

done by personnel highly trained in hospital operations. An accreditation firm is retained to conductthese inspections. Periodic Accreditation is done by The Joint Commission. The Joint Commission

conducts accreditation surveys of many healthcare facilities in the US to determine their compliance

with nationally-established standards. The standards include an organizations level of performance in

key areas such as: patient rights, patient treatment and infection control. They also focus on the

hospitals ability to provide safe, high-quality care. To earn and maintain accreditation, an organization

must undergo an on-site survey by a Joint Commission survey team at least every three years. The Joint

Commission may be contacted by telephone at 1-800-994-6610; by fax at 1-630-792-5636 or by mail at:

Office of Quality Monitoring, The Joint Commission, One Renaissance Blvd., Oakbrook Terrace, IL 60181.

(jointcommission.org)


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References:

(n.d.). Retrieved from www.ageing.oxfordjournals.org:

http://ageing.oxfordjournals.org/content/37/3/248.full

(n.d.). Retrieved from /www.asianhhm.com:

http://www.asianhhm.com/facilities_operations/contamination_containment.htm

(n.d.). Retrieved from www.jointcommission.org: http://www.jointcommission.org/

(n.d.). Retrieved from www.comptroller.nyc.gov:

www.comptroller.nyc.gov/bureaus/audit/PDF.../MG03_059A.pdf

Food Poisoning. (n.d.). Retrieved from www.nyp.org: http://nyp.org/health/nontrauma_foodpois.html

Hospital Evacuation Decision Guide . (n.d.). Retrieved from www.ahrq.gov:

http://www.ahrq.gov/prep/hospevacguide/hospevactab6.htm

Medical Malpractice. (n.d.). Retrieved from West's Encyclopedia of American Law:

http://www.answers.com/topic/medical-malpractice#ixzz1JEvgGYQA

Rossi, C. (n.d.). Reduce Hospital Workers' Compensation Insurance. Retrieved from www.hubpages.com:

http://hubpages.com/hub/Reduce-Hospital-Workers-Compensation-Insurance

Rejda, G. E. Principles of Risk Management and Insurance 10 edition. New York: Pearson.

Risk Assessement. (n.d.). Retrieved from www.ucd.ie: www.ucd.ie/.../vetsriskassess/UCDF15%20Oxygen%20Generator%20Risk%20Assessment.doc