Risk Management is Not Risky Business
“Every risk is worth taking as long as it’s for a good cause and contributes to a good life” Richard Branson! Operating a business that relates to the care and/or quality of human life is probably the riskiest kind of business one can engage in. People lose money all the time. Money is fluid and it can be replaced. Human life cannot. Another fact is, no business operates without a level of risk.
The healthcare industry is among those with the highest operational risk potential. Sometimes it may seem like “No good deed goes unpunished”! Caring for people is a joy and pain that Assisted Living Facility, Adult Group Homes and Personal Care Home owners take on in their quest to provide quality of life for their residents. It’s a balancing act between staffing, medical treatment management and the families of the residents. It’s a tough job and even more so for the “mom and pop” style facilities, but someone has to do it. Therefore, Risk Management is crucial to this industry. One severe loss can result in the dissolution of an entity in less than a year. Loss frequency is the equivalent to dying a slow death by chronic illness.
So, what is Risk Management (RM)? Quite simply, it’s a process of identifying possible risks, problems or disaster before they happen and designing a plan to avoid, minimize/reduce the risk, or cope with its impact (i.e. let your insurance pay for it). In the insurance market, there is a popular notion that “this will never happen to me”, until it does! Risk Management is the antidote for the shame that comes from experiencing a foreseeable loss, yet taking no action. Though some may think RM planning is a daunting task, and it may be depending on the size and type of facility, but the steps are simple. First up, Risk Identification, which answers the question, “What can go wrong?”. Next, Risk Analysis, which addresses, “How will we be affected?”. Then, Risk Control, “What can we do about it?”. Lastly, Risk Solution, “If it does happen, how will we pay for it?”.
Let’s talk benefits of Risk Management for Assisted Living Facilities, Group Home and Personal Care Homes? These types of facilities often experience a high volume of “slip and fall” and death claims. With a RM plan in place, the facility can;
- Saving valuable resources: time, income, assets, people and property
- Creating a safe and secure environment for staff, visitors, and customers
- Reducing legal liability and increasing the stability of your operations
- Reducing your threat of possible litigation
- Defining your insurance needs to save on unnecessary premiums
Taking risk can be scary, especially when you’re trying to do good. However, it’s unavoidable. Buying insurance is a first line of defense, but appropriate policies and procedures are just as important to protect the reputation, continued operation and financial security of a facility. Insurance and Risk Management are a power couple when utilized together. They are the team you want in your corner to fight risk!