Costs are high for businesses in long-term care. So are the risks. And operators experiencing a constant are push and pull pressure to make things balance out.
Medicare / Medicaid reimbursements to cover their costs are in a state of flux. Finding staff members who are skilled, caring and affordable is an ongoing issue, especially in a full-employment economy. And depending on the type of facility / community, the outcome is pre-determined: Within two years, on average, the resident will pass away.
A large component of these facilities’ operating costs is insurance — largely, professional liability, general liability and worker’s compensation. Compounding the problem is today’s back drop of loss ratios, which one study shows are increasing by 6% annually even as claim severity grows by 4%. It’s leading to an increasingly hardening market.
This environment makes it more important than ever before for long-term care providers to proactively mitigate their losses with an aggressive approach to risk management.
Even the best-managed facility will experience claims stemming from events or circumstances that are out of its control. But the more that is put into a concerted effort drive to offset risk, the better the ability to reduce claims, manage and negotiate them more effectively, and overcome the difficulty of renewal in a tough market.
Here are four crucial areas tied to preventable losses that management at every long-term care organization should think about addressing:
No. 1: Show you care.
It sounds easy, but it actually is just as easy to let slide: Make sure you know the family members of your residents, and make a point of staying in touch – backing it up, of course, with high-level, quality care.
Setting family members’ expectations and establishing a relationship with them at the beginning, when the resident moves in, makes a difference in future claims. It’s likely, depending on the type of facility / community, that their loved one won’t be leaving unless a transfer is necessitated. If family members believe their loved one has been well cared for, then they’ll be less likely to file claims.
No. 2: Be smart, careful and detail-minded in your hiring practices.
It’s a competitive employment market, and your pool of qualified employees may be limited. But prospective hires must be thoroughly vetted for potential issues in their backgrounds. They also need to be able to demonstrate their knowledge about the care they provide, which means they have the experience, a good attitude and an affinity for older people.
No. 3: Make sure your policies and procedures for resident care and your workplace environment are adequately laid out and communicated.
The two biggest risk areas for long-term care providers are wound care and falls (by residents and visitors). Other concerns, however, from abuse in every form and medication errors to emergency evacuation issues, can’t be overlooked. Make sure your protocols reflect best practices for management, including standards for the complete documentation of every incident.
Don’t overlook workers’ compensation claims in your policies, as they are a big issue in the long-term care environment, tying back to lifting and repositioning residents. Ongoing training should be conducted to remind staff of the proper techniques.
No. 4: Mind what others think.
It’s important to manage your reputation. State and federal rating systems, such as the Centers for Medicare & Medicaid Five-Star rating system, are more than just a guide for consumers to the quality of long-term care facilities. Insurers also refer to them when making important underwriting and pricing decisions – and a low, one- or two-star rating is going to affect the cost and availability of your insurance. Also be aware that carriers (and consumers) monitor the internet to be on top of what’s being said about facilities / communities on social media and ratings websites.
Today’s long-term care providers have developed a high level of sophistication in running profitable businesses despite a very high-cost environment. Operators are well advised to apply the same degree of savvy to their risk-management practices.