A Collaborative Approach to Enterprise Risk Management (ERM - PowerPoint Presentation

Slide1

A Collaborative Approach to Enterprise Risk Management (ERM)

Application of ERM in Assessing Pandemic Risks in a Health Care Organization

Liane McGarvie, MHA, MBA, CPHRM

Director, Patient Safety & Risk

Virginia Mason

Helen Vrabel, CPCU, ARe

Sr. Vice President

MarshSlide2

http://www.newyorker.com/wp-content/uploads/2015/02/daily-cartoon-150202-measles-1200.jpg

The New Yorker, Daily Cartoon

Emily Flake

February 2, 2015Slide3

International New York TimesSlide4

BackgroundSlide5

Pandemics, Epidemics of the last century

2009 – 2010: Influenza A (H1N1), commonly known as swine flu, infected as many as 576,000 people worldwide resulting in more than 18,000 deaths

2003: Avian influenza A(H5N1) emerged in Southern China, spread to 15 countries in Asia and Middle East with 628 human cases, 374 deaths

2003: SARS had nearly 8,100 probable cases in 29 countries, 774 died1981: AIDS caused an estimated 39 million deaths worldwide since first reported in

198; and HIV remains the world’s

leading infectious killer with 1.5 million AIDS-related deaths in 2013

1977-1978: Russian Flu, a version of N1N1 strain affected those born after 1950 who had not developed anti-bodes from similar outbreak decades earlier

1968-1969: Influenza A (H3N2) originating in Hong Kong killing 1 million people worldwide

1957-1958: Asian Flu, first seen in China, spread to Singapore, Hong Kong then US where death toll reached approximately 70,000 with estimates of one to four million deaths worldwide

1918-1920 Spanish Flu caused by unusually severe strain of H1N1 was seen in every country, even the Arctic and remote island nations. Fatalities estimated from 50-100 million people, mostly young adults who perishedSlide6

Costs of Epidemics

Ebola - "The

public has been clamoring for near-zero risk, forcing the public health system to go way beyond what science and common sense requires," said Lawrence Gostin, faculty director of the O'Neill Institute for National & Global Health Law at Georgetown. "We really have overreacted, and it's cost us a lot of money

.“"The fear factor from the Ebola outbreak has reduced labor force participation, closed places of employment, disrupted transportation, and motivated some government and private decision makers to close seaports and airports," Jim Yong Kim, World Bank president said at a press conference last week. The “tide of fear” triggered 80% to 90% of the economic impact

2002

to 2004, SARS, or Severe Acute Respiratory Syndrome, infected about

8,000 in 29 countries,

killing 800, and caused more than $40 billion in economic losses. But 80% to 90% of those losses came from "fear and aversion" — when people canceled flights and hotel stays in cities affected by the virus, for example — rather than medical costs

.

Fear

factor, World Bank: Cost of Ebola could top $32 billion by Ivana Kottasova, CNN 10/9/2014

Kottassova

, I. 2014, Oct. 9. Fear

factor, World Bank: Cost of Ebola could top $32

billion. Retrieved

May 22, 2015 from http://www.cnn.com/2014/09/24/business/ebola-cost-warning/Slide7

Governmental costs

Sen. Schumer requested $20 million to reimburse New York City for caring for a single Ebola patient (includes monitoring his contacts and tracking travelers from West Africa)

Dallas County spent $1 million (including $250,000 to decontaminate apartment of Ebola victim)

The international effort to end the outbreak that hit Guinea, Liberia and Sierra Leone last year cost an estimated $4.3 billion. Building up those countries’ health infrastructures in the first place would have cost about $1.58 billion, according to

Save the Children Foundation.

Shafroth, F. 2015, Jan. 4. Ebola

Scare Highlights the Uncertain Costs of a

Pandemic Questions

loom about who will pay for the fallout of a national health crisis and what kind of impact it could have on credit

ratings. Emergency Management.

Retrieved May 22, 2105 from https://www.google.com/search?q=shafroth+frank+ebola+emergency+management&sourceid=ie7&rls=com.microsoft:en-us:IE-Address&ie=&oe=&gws_rd=sslSlide8

Costs of Ebola - Hospitals

Treating an Ebola patient at U.S. hospitals costs $25,000 to $50,000 a

day Nebraska Medical Center’s costs were $1.16 million.

$148,000 in revenue lost when nearby beds had to be closed off to accommodate a special Ebola isolation wardPresbyterian - initial

Revenue decline by more than 25 percent in the first 20 days of October, Emergency room visits fell by 53

percent (mostly because it closed the ED)

Surgeries declined by about 25 percent.

Presbyterian – long-term

Dec

. 1-15, emergency room visits at the hospital were down by about 4

percent

Daily

number of patients was down about 2 percent compared to the first nine months of 2014.

Szabo, L. 2015, Dec. 19. Costs of responding to Ebola adding up.

Retrived

on May 22, 2015 from

http://www.usatoday.com/story/news/nation/2014/11/25/ebola-costs-add-up/19346913

/

Stegle

, J. 2015, Jan. 14. Patients return to Dallas hospital where Ebola hit, revenue back to pre-crisis level. Retrieved May 22, 2015 from

http://

finance.yahoo.com/news/patients-return-dallas-hospital-where-231442739.htmlSlide9

BackgroundSlide10

Timeline of Events

http://

www.cdc.gov/vhf/ebola/outbreaks/2014-west-africa/united-states-imported-case.html

http://www.cdc.gov/vhf/ebola/outbreaks/2014-west-africa/whats-new.htmlSlide11

Timeline of Events – Local PreparationSlide12

Risk ManagementSlide13

Enterprise Risk Management Process

http://www.ashrm.org/ashrm/education/development/monographs/white-papers/ERM-White-Paper-8-29-14-FINAL.pdfSlide14

Enterprise Risk Management

Assessment of RiskSlide15

A Collaborative ApproachSlide16

Categorizing RisksSlide17

Customization/Adapt to OrganizationSlide18

Enterprise Risk Management

Is it covered?

General Liability

Injury/mental anguish;

infection to

other workers,

family members or 3

rd

partiesSlide19

Evaluate Current Coverage/Identify GapsSlide20

Lessons Learned

Risk was at a tolerable level to retain

New insurance products for Ebola response did not have sufficient levels to cover all exposures at the time of analysis

Limited

by multiple

exclusions

Additional Cost > Benefit

Attained a better understanding of existing coverageSlide21

Strength of ERM ApproachSlide22

Conclusion

Leverage the power of collaboration upstream and downstream when assessing risk in your organization

Include stakeholders from across the organization – including front line staff who know actual processes vs. written proceduresUse past experience/lessons learned to develop proactive assessments

Reach out to insurance brokers, companies to identify possible coverageSlide23