Managing Organizational Risk

1
Managing Organizational Risk

• John R. Elliot
• President
• AMFM, Inc.
• jelliot_at_amfmwv.com

2
Principles of Risk Management

• Risk management should
• Create value.
• Be an integral part of organizational processes.
• Be part of decision making.
• Explicitly address uncertainty.
• Be systematic and structured.
• Be based on the best available information.
• Be tailored.
• Take into account human factors.
• Be transparent and inclusive.
• Be dynamic, iterative and responsive to change.
• Be capable of continual improvement and
  enhancement.
• Source International Standards Organization, as
  posted on wikipedia.com

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Managing Organizational Risk Opportunities

• Arbitration
• Charge Nurse As Manager
• AMFM University
• Job Descriptions/Partnership Plan
• Structure/Asset Protection
• Reducing Indirect Costs
• Off-Shore Captive
• My Innerview
• Quality Innovations
• Turnover/Retention
• CNA Documentation Documentation by Exception
• Electric Beds and Air Mattresses
• Process Development

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Arbitration

• 87.25 of residents have a signed arbitration
  agreement since inception
• Two court rulings have upheld our arbitration
  agreement
• Currently 6 of unsigned agreements are within
  the statue of limitations
• Residents without a signed arbitration agreement
  are flagged as high risk and are reviewed
  weekly by the interdisciplinary team (see Quality
  below)

WV DHHR is not permitted to sign arbitration
agreements
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Charge Nurse as Manager

• The Problem
• Traditional management in facility only 5 out
  of 21 shifts per week
• Lack of structured management training
• Ineffective chain of command and communication
  with employees

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Charge Nurse as Manager

• The Action Steps
• Employee handbook created with input from
  employee committee
• Charge nurses promoted into management to provide
  24 hour management presence
• Management training modules created and all
  members of the management team required to attend
• Chain of command updated and implemented as part
  of the training program
• Management training included the issue of
  perceived fairness and consistency
• Grievance format developed and implemented with
  all employees

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Charge Nurse as Manager

• The Action Steps (continued)
• All nurses given wage increase for the additional
  management duties
• Program provided education on management duties
  of a unit charge nurse
• The new managers evaluated and given reeducation
  if needed
• The concept of QI observed through audit and
  outcome tracking
• Discipline used for non performers
• Termination used for those who would not embrace
  the management concept
• Program developed according to NLRB requirements
  for management

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Charge Nurse as Manager

• The Outcome
• Charge Nurse as Manager challenged by the union
  (Steelworkers)
• NLRB ultimately ruled that the nurses were
  managers

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AMFM University

• In third year of Silverchair as provider of
  online education for staff
• Staff complete coursework when its convenient for
  them
• Increased employee satisfaction in second year of
  MyInnerview employee responses
• Allows incorporation of AMFM policy into
  mandatory annual education
• Quick response time for a specific issue that
  requires audited training compliance at all
  levels of organizational
• Expanding in 2009 to include LPN/RN continuing
  education

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Job Descriptions/Partnership Plan

• Retooling of job descriptions beginning second
  half of 2008
• One document combines
• Job description
• Facility and position-specific goals and
• and the performance evaluation
• No gray areas in job description performance
  standards are clear, concise, and measurable
• Senior facility management demonstrates increased
  fiscal responsibility since evaluations are
  completed twice a year in alignment with the cost
  reporting periods
• Superior performance is rewarded twice a year as
  well through the partnership plan

11
Page from Original Job Description Executive
Director
12
Page from Revised Job Description Executive
Director
13
Structure/Asset Protection

• Old System
• Clinical staff on AMFM
• AMFM holds all assets
• Health Care Plan
• Liability Insurance
• AMFM named in litigation puts assets at risk

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Structure/Asset Protection

• New System
• Clinical staff remain on AMFM
• AMFM has contractual agreement to provide
  services to facilities
• Carve out all possible services and put under
  Commercial Holdings
• Commercial Holdings owns all assets
• Commercial Holdings has contractual agreement
  with AMFM
• Assets are protected in litigation

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Structure/Asset Protection

• Old

• New

AMFM
AMFM (Home Office)
CHI (Assets)
Facility
Facility
Real Estate
Real Estate
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Reducing Indirect Costs

• Workers Comp Rates
• Move senior facility management staff to Home
  Office Payroll
• Safety bonus initiated in 2003 (cash payment for
  every employee for No Lost Time Injuries every 90
  days)
• 796,750 paid to date

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Workers Compensation

• 2003
• Claims 155
• Total cost of claims 1,045,228
• Cost per claim 6,743
• Premium 2,156,599

• 2008
• Claims 18
• Total cost of claims
• 24,399
• Cost per claim 1,355
• Premium 648,148

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Workers Compensation
19
Off-Shore Captive
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Off-Shore Captive
Amount determined based on a 3rd party
actuarial study
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Off-Shore Captive
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MyInnerview

• MyInnerview
• In third year of MyInnerview survey process
  company wide opportunities identified
• Loss of personal items
• Purchased and initiated personal items labeling
  system in all facilities
• Purchased safes for all residents through
  national Crime Stoppers program
• Communication between facility and family
• Initiated post-admission conferences
• More frequent communications with care planning
  team
• Facility-specific action plans are ongoing

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Quality Innovations

• Company-wide clinical scorecard highlights
  problem areas based on survey, QI/QM, and
  internal compliance auditing data
• Programming needs with the most return on
  investment are easily identifiable and uniquely
  problematic facilities are easily identified
• CSI (Compliance Systems Interventions) Daily QA
  process monitors high risk patients
• Refused to sign arbitration agreement
• Care refusals and patients acting against
  medical advice
• Condition Changes (Wounds, weight changes, and
  hospitalizations )

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Turnover/Retention

• Retention demonstrates better measure of employee
  satisfaction than turnover alone
• Turnover paired with retention highlights
  revolving door positions and allows increased
  focus on the root cause of turnover

25
Data quantifies the number of times open
positions turned over lt1 open positions not
filled 1 open positions were filled and new
employees retained gt1 positions were filled
then turned over again
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CNA Documentation Documentation by Exception

• CareTracker provides the platform for CNA
  documentation
• Nearly 10,000 points of data per day are captured
  by CNAs per 60 beds
• Exception reports are printed by the Unit Charge
  Nurses at the start of each shift and become the
  basis for plan of care reviews and changes
• Nurse managers are able to review documentation
  to ensure that affected residents receive
  interventions necessary to avoid negative outcome
  AND that appropriate documentation related to the
  situation exists

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Impact of CNA Documentation on Medicaid Case Mix
Add-Pay
2008 is annualized based on 9 months of actual
data
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Electric Beds and Air Mattresses

• Annual rental expense of specialty bed
  mattresses 857,000
• Purchased new electric-controlled beds
• Purchased pressure reducing mattresses with
  alternating air pressure relieving functionality
  for every patient
• Capital cost of 538,000 annually for 4 years
• Early reports indicate improvement in pressure
  wound development in high-risk patients and
  decreased wound healing time

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Process Development

• Policy An overall plan, principle, or guideline
  (required by regulation)
• Procedure The order or method of doing
  something(also required by regulation)
• Process A series of actions, changes, or
  functions bringing about a result (the down and
  dirty, step by step, who is responsible, who does
  it as backup, and how is that step in the process
  audited)

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Process Development

• The intent is to evaluate a day in the life of
  the resident and task out who does what, and
  when
• Professional staff are doing tasks that require
  their licensure and certification
• Delegate tasks to unlicensed staff that do not
  require professional licensure or certification
• Allow direct care givers more time to provide
  bedside care, implementing and monitoring the
  plan of care

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Process Development

• 70/20/10
• We started with Business Processes (which are
  more black white)
• Scheduling
• Managing staff budgeting according to Census
• 75 of total costs are managed by controlling
  hours BEFORE shifts are worked

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Process Development
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Process Development

• Process must be maintained outside the regulatory
  control of policies and procedures.
• Process is for internal staff use during
  orientation and training.

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Process Development

• Example Reportable Incidents
• Problem survey citations for reporting
  incidents and accidents to state survey agency.
• Policy is to report as required by regulation.
• Procedure tells who to contact, and how to
  contact.
• Decision tree of determining reportability of
  incident and accidents (the process) was
  incorporated in policy.
• Policy was cited 6 times in as many months during
  survey for non-compliance with regulation.
• Why? Process was deemed to be in conflict with
  regulation by asking staff to report an incident
  to a facility manager to ensure guidelines are
  followed before reporting to survey agency.
• There is policy. There is procedure. And there is
  process.

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Process Development
Processes are prioritized by facility staff
actually performing the related tasks. Top 10
business processes
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Process Development
Processes are prioritized by facility staff
actually performing the related tasks. Top 10
clinical processes