CONTROL & RISK MANAGEMENT

STRATEGIC MANAGEMENT IN HEALTHCARE

7 April , 2008

CQI AND CONTROL

• PROCESSES CAN BE IMPROVED

• CONTROL IS DIRECTED AT PROCESSES

• INPUT CONTROL IS NO SUBSTITUTE FOR PROCESS AND OUTPUT CONTROL

CONTROL MONITORING POINTS

• INPUTS - PROSPECTIVE– FEED FORWARD CONTROL

• PROCESSES - CONCURRENT– SCREENING CONTROL

• OUTPUTS - RETROSPECTIVE– FEEDBACK CONTROL

INPUT CONTROL

• FOCUSES ON RESOURCES CONSUMED

• IN A SERVICE INDUSTRY THIS USUALLY MEANS PERSONNEL

• PHYSICAL RESOURCES SHOULD NOT LIMIT PERSONNEL BUT USUALLY DO

PROCESS CONTROL

• OUTPUTS ARE DETERMINED BY:– AMOUNT & APPROPRIATENESS OF

INPUTS– EFFICACY & EFFICIENCY OF PROCESS

OUTPUT CONTROL

• ALSO CALLED FEEDBACK CONTROL

• QUALITATIVE & QUANTITATIVE

• REQUIRES STANDARDS OR EXPECTATIONS

• OFTEN QUANTITATIVE

CONTROL METHODS

• BUDGETING

• COST ALLOCATION

• RATIO ANALYSIS - % OF EXPECTED

• FINANCIAL STATEMENTS/ANALYSIS

• OPERATIONAL ACTIVITY ANALYSIS

• BENCHMARKING

• STANDARD SETTING

DESIGNING CONTROLS

• INFORMATION BASED

• PROSPECTIVE WHEN POSSIBLE

• REALISTIC & UNDERSTANDABLE

• ACURATE, TIMELY & RELIABLE

• IMPORTANT &/OR COST-EFFECTIVE

INFORMATION SYSTEMS

• MANAGERIAL - HUMAN RESOURCES

• CLINICAL – DOCTOR VISITS

• MIXED - LABORATORY

• GARBAGE IN, GARBAGE OUT

• IF A SYSTEM IS NOT FUNCTIONAL, COMPUTERS WILL MAKE IT WORSE

RISK MANAGEMENT

• PRIMARY, SECONDARY, AND TERTIARY PREVENTION

• SPECIALTY OF LAWYERS• ABOUT STANDARDS• ABOUT LOSSES

– MONEY– REPUTATION/BUSINESS– FREEDOM

RISK MANAGEMENT

• AVOID OR REDUCE LOSSES/MISTAKES

• MITIGATE THE DAMAGE FROM LOSSES/MISTAKES

• INSURE AGAINST LOSSES/MISTAKES

• OBEY THE LAW

STEPS IN RISK MANAGEMENT

• IDENTIFY

• EVALUATE

• REDUCE/ELIMINATE

• TRANSFER/INSURE

WHEN A LOSS OCCURS

• SECURE THE RECORDS

• MITIGATE DAMAGES

• DON’T ADD INSULT TO INJURY

• BE SMART ABOUT BILLS

• SUPPORT YOUR PEOPLE

SELF-INSURANCE

• YOU ARE YOUR OWN INSURANCE COMPANY

• REINSURANCE OR UMBRELLA IS USUALLY NECESSARY

• DEDUCTIBLE IS A FORM OF SELF-INSURANCE

INCIDENT REPORTS

• MAY BE USED FOR NUMBERS ONLY

• SERIOUS PROBLEMS NEED A FAST TRACK

• MUST HAVE A CORRECTIVE ACTION COMPONENT - DON’T JUST DOCUMENT YOUR STUPIDITY!

INDEMNIFY & HOLD HARMLESS

• USUALLY A STUPID IDEA FOR BOTH PARTIES

• DON’T EVER SIGN ONE YOURSELF

• INSURANCE OR A BOND IS THE RIGHT WAY TO DO THIS