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Integrating BUSINESS and CLINICAL management
- By Shirley Liew
- Published 10/02/2010
- Risk Watch
- Unrated
Key business risks
Although they are critical to an organisation’s viability, a number of key business risks in aged care are often ignored.
One commonly overlooked area is that of contract management and service level agreements with third party contractors. Service failures or interruptions can result in unintended increases in clinical and operating expenses that may negatively impact cash flow, liquidity, financial performance and capital. They might also result in injury or damage to third parties that could result in expense to the institution.
Some key risks in this area relate to provider credentialing, vicarious exposures, apparent authority and ostensible agency, good faith and fair dealing, provider selection and compliance.
Other liabilities include boards which operate a company while insolvent. Boards therefore need to have a clear and unfettered view of cash flow positions and financial risks.
Revenue risks can arise from the time a resident is registered to the point of billing with many numerous opportunities for things to go wrong. Examples include demographic information, charges missing and outdated codes. Knowledge is power and identifying revenue-cycle risks empowers organisations to control the threats to its financial performance, compliance and operations.
Advertising risks, such as exaggeration and unsubstantiated claims, may pose a legal risk to an institution. It is important to distinguish between factual messages and opinions. Factual messages provide objective, verifiable information to consumers. Certain facts about the facility, such as religious or ethnic affiliation, the cost of service and care hours provided, may determine consumer preference in certain cases,
Opinions try to influence the consumer to believe that the facility offers a positive subjective attribute. Advertisers should be able to substantiate the claims and the types of testimony that they use. Language such as “best care”, “world class facility”, “first class staff”, “extraordinary” and “individualised care” should be avoided.
The benefits of ERM
If avoiding sanctions is not incentive enough, try resilience. Apart from a broad base approach, ERM provides opportunities to improve efficiencies, streamline compliance costs and provides management and stakeholders a better view of risks.
This further facilitates improved decision making and creates greater empowerment, control and monitoring of risks. Understanding and reporting key risks indicators also helps to improve transparency.
Streamlining of governance, risk and compliance reduces the much loathed paperwork and effort surrounding accreditation and audits.
Finally, having clear view of risk and an integrated model of risk management increases flexibility and responsiveness of a provider to respond and be more opportunistic. This is critical for organisations to be successful and build the resilience and challenges which abound.
Shirley Liew is the director of risk services at Moore Stephens Sydney.
Compliance risks
Some key risk indicators associated with non-compliant homes include:
Although they are critical to an organisation’s viability, a number of key business risks in aged care are often ignored.
One commonly overlooked area is that of contract management and service level agreements with third party contractors. Service failures or interruptions can result in unintended increases in clinical and operating expenses that may negatively impact cash flow, liquidity, financial performance and capital. They might also result in injury or damage to third parties that could result in expense to the institution.
Some key risks in this area relate to provider credentialing, vicarious exposures, apparent authority and ostensible agency, good faith and fair dealing, provider selection and compliance.
Other liabilities include boards which operate a company while insolvent. Boards therefore need to have a clear and unfettered view of cash flow positions and financial risks.
Revenue risks can arise from the time a resident is registered to the point of billing with many numerous opportunities for things to go wrong. Examples include demographic information, charges missing and outdated codes. Knowledge is power and identifying revenue-cycle risks empowers organisations to control the threats to its financial performance, compliance and operations.
Advertising risks, such as exaggeration and unsubstantiated claims, may pose a legal risk to an institution. It is important to distinguish between factual messages and opinions. Factual messages provide objective, verifiable information to consumers. Certain facts about the facility, such as religious or ethnic affiliation, the cost of service and care hours provided, may determine consumer preference in certain cases,
Opinions try to influence the consumer to believe that the facility offers a positive subjective attribute. Advertisers should be able to substantiate the claims and the types of testimony that they use. Language such as “best care”, “world class facility”, “first class staff”, “extraordinary” and “individualised care” should be avoided.
The benefits of ERM
If avoiding sanctions is not incentive enough, try resilience. Apart from a broad base approach, ERM provides opportunities to improve efficiencies, streamline compliance costs and provides management and stakeholders a better view of risks.
This further facilitates improved decision making and creates greater empowerment, control and monitoring of risks. Understanding and reporting key risks indicators also helps to improve transparency.
Streamlining of governance, risk and compliance reduces the much loathed paperwork and effort surrounding accreditation and audits.
Finally, having clear view of risk and an integrated model of risk management increases flexibility and responsiveness of a provider to respond and be more opportunistic. This is critical for organisations to be successful and build the resilience and challenges which abound.
Shirley Liew is the director of risk services at Moore Stephens Sydney.
Compliance risks
Some key risk indicators associated with non-compliant homes include:
- the number of claims throughout a given period;
- the number of events relating to potential patient harm;
- the incidences of errors or refunds;
- the number of patient complaints;
- staff turnover and churn;
- the adequacy of staff orientation and ongoing training;
- staff/patient ratios;
- the timeliness of management reporting; and
- variance to budgets.
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