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Reducing liability
Does the care sector need a different approach?

Risk management is a huge task that must be effective. In this piece, Jerry Oliver, Head of Consulting at Markel UK, argues that insurers need to provide management the know-how and tools to tackle the root cause of risk within their organisation if a genuine reduction in liability is to be achieved.

Care facilities face a daily challenge of managing risk and live in hope that the measures taken will be enough to avoid any incidents of note.

For many, however, the task of risk management can not only be a major challenge in the face of the daily effort required to run a care facility, but potentially ineffectual as well.

The 2017/18 NHS Resolution Annual report and accounts showed the organisation mediated more claims during that period than in its entire history. The NHS payed out over £1.63bn in damages – up from £1.08bn in 2016/17 – for legal claims against primary care practices and hospitals. The total provisions for all NHS indemnity schemes rose from £65bn in 2017 to £77bn at March 2018.

Figures like these are being mirrored across all aspects of the social and private care sectors and, in response, underwriters are more cautious about writing care risks and are of course increasing premiums to reflect actual and anticipated claims experiences.

Such a scenario isn’t helpful for a care sector already under severe financial pressure. Better for everyone is to reduce the volume and severity of claims, and for care providers to present themselves as a more attractive proposition to underwriters when looking to renew their insurance.

But how? Care providers must adopt a new and innovative approach to risk management within their organisations. Essential to this is the need for an improved understanding of risk at all employee levels, and specialist business support to create more compliant organisations.

Traditional risk management practices

Risk management is a cornerstone in the prevention of accidents and incidents within care facilities, but risk reduction efforts typically focus on traditional health and safety techniques. Methods such as physical and mental risk assessments tend to be reactive in nature and not address the root cause of many incidents that occur.

A shift towards an environment of reduced claims experience will only occur when operators have the tools to tackle the root cause of the numerous risks they face. Management education around risk and business support is fundamental. With these services in place, the industry will be able to lessen professional indemnity, employee and public liability claims.

Informing the decision-making process

Educating managers about the risks their organisation faces and how these can be mitigated is central to the risk management challenge.

Ultimately, the behaviour of managers is adapted through a greater awareness of the risks they, and their organisation, are up against. Equipping employees with more effective tools and enhanced knowledge will help to install more robust and appropriate risk mitigation processes than otherwise might be the case. With better knowledge and processes, claims frequency will reduce and there will also be greater resistance to fraudulent or overstated claims.

This approach not only reduces risk, but also enables managers and their organisations to more easily defend against allegations of negligence and alleged failures in their duty of care if and when they arise.

Organisations can take a number of steps in an effort to become better informed and take effective action.

Each step should be fully supported by their insurer’s advice and guidance:

  • Top-down responsibility – own risk management at board level, and allocate operational responsibility to a senior manager. Ensure senior managers are aware of the latest guidance on issues such as safeguarding, slips, trips and other hazards, and protecting staff from violent or aggressive behaviour.
  • Training integration – include risk management within the induction process at all levels and provide regular policy training. Any supervisory activity should include a risk management element and senior staff should be trained to handle investigations when an incident does occur.
  • Reporting requirements – local authorities will require specific reporting, particularly around issues such as safeguarding, but this information will also inform management teams. Ideally, providers should include this requirement within procedures. Care Quality Commission (CQC) reporting also needs to be taken into account to ensure there is a clear understanding of which incidents need to be reported.
  • Careful record keeping – careful record keeping is important. Following an event, detailed factual accounts can be produced and provided to authorities. Add details of all events and incidents to a log and create management reports for senior managers and your broker/insurer.
  • Trend evaluation – audit the management reports to look for patterns or trends and consider whether action is needed to address root causes where identified. Be aware of wider issues occurring in the sector and challenge your organisation on how your systems would have responded to particular incidents.

Supporting business operations

Business operational support can improve the performance of an organisation, improve compliance and reduce liability risk.

Most organisations within the adult care sector are subject to CQC inspections that require them to be fit for purpose. An inspection failure will often be an indication of unsuitable processes and poor management performance. In turn, this is likely to lead to an increased liability risk for that organisation and their insurers.

Specialist consultancy and legal support – including improving judgements following CQC inspections – can help a care organisation to perform more effectively. By definition, this activity will create more effective and compliant processes which, in turn, will lessen liability risk.

Case study – reducing claims in the care sector

Background
Markel Care was invited by a large cross-regional provider of children’s care homes and educational services to consider potentially overstated and vexatious claims. Eight claims had been lodged in a short period of time and more were expected – the majority related to staff alleging they were hurt in client related incidents. It was becoming a very difficult position for reinsuring and the provider was at a loss to understand how to address the matter.

The support Markel provided
Markel Care consultants reviewed the claims, undertaking an analysis to quantify the extent of the problem and potential solutions. It was agreed with the client that liability-dampening training workshops, rooted in professional practice incidents, would be the best focus of initial input. Then looking at ensuring the practice recording and sighting of liability, together with HR processes, would be best places to input.

The outcome
It was jointly agreed with the provider that a series of four workshops across the regions would be actioned, inviting key operational staff. These considered the increasing litigious societal context in the care sector together with a number of incidents within the group and the solutions which could be readily implemented to dampen if not exclude fraudulent and exaggerated claims. A new reporting tool was designed to capture their initiatives. Including HR and receiving support from key directors was a key feature of the successful support delivered.

Following up a year later, the claims position has reduced to two and these were both for the same staff and were in the process of investigation. Follow up some three years later showed that the systems put in place were still holding and liability dampening was sustained.

We’ve seen that liability losses are a problem for the insurance industry, and operators, and the traditional health and safety approach to risk management has its shortcomings in addressing this issue.

Through educational support for all staff, better processes, detailed analysis and management reporting and specialist business consultancy support, insurers can help the industry to address their losses by reducing claims histories, and ultimately lowering the costs of premiums for the insured.

Jerry Oliver is Head of Consulting at Markel UK. Twitter: @MarkelUK

How do you show insurers that you’re working to reduce risk? Share your tips and experiences in the comments section, where you can also leave feedback on this feat

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