ERM: Aussie style

Valuable lessons can be learnt by looking beyond the US to examine the way healthcare risk management is tackled in other parts of the world. Petra Hyam, group director for risk, internal audit and productivity improvement for Epworth HealthCare in Australia, discusses with HRMR the challenges and opportunities she is currently facing.

Like many healthcare risk managers, Petra Hyam pursued other careers before discovering the job that brought all her skills and interests together. She originally studied psychology and worked with people with disabilities before returning to university to study statistics. This led to a career in risk management in banking and finance, which she left in order to pursue a career in healthcare risk management.

“The appeal of healthcare risk management was basically that if you did your job well you would really make a difference to people’s lives,” she says. She is now responsible for risk management for the whole of Epworth HealthCare, Victoria’s largest not-for-profit private hospital group. It has four acute care hospitals, a rehabilitation division based in four locations and a number of smaller healthcare facilities dotted around Victoria. In total it has more than 4,500 staff.

Faced with responsibility for a number of facilities in different locations, Hyam’s main preoccupation at present is embedding enterprise risk management (ERM) into Epworth’s practices.

“In Australia, a lot of risk managers traditionally have a clinical, namely nursing, background. I see my non-nursing background as an advantage, as I don’t have preconceived ideas on how things should be done, and I don’t approach my role from an incident management perspective. Certainly, the management of incidents in a robust manner is extremely important, but I see this as only one aspect of risk management,” she says.
Risk managers in Australia are the driving force behind the implementation of ERM, because they are best people equipped to do so. ERM is about being more proactive and future-focused, rather than maintaining a reactive, incident-focused, risk management model, she explains.

“We’ve adopted an ERM model at my organization as our board, executive and leadership team are committed to improving the way we do things. We see that the most effective and sustainable means of managing risk comes from experts in their fields, guided by a risk management framework, rather than something prescribed by the risk manager.

“Essentially, I don’t believe that one or two people in an organisation can manage the full spectrum of risk categories whether clinical, organisational, safety, financial or strategic. Managing the investigation of incidents might be feasible, but not managing the risk itself, as this needs to be understood at every level and in everyday practice of all people in the organization. Risk experts might identify areas for improvement through analysis and review, but who best to guide practice changes and improvement than nurses, doctors, economists, engineers and safety officers who are specialists in these areas?”

Hyam believes the switch to ERM is vitally important because in Australia several factors are converging: first and foremost, due to the size of the baby boomer generation, the numbers of people ageing is growing at 12 times the rate it was five years ago. In the coming years, people aged 65-plus will dominate the population profile and consequently the patient profile.

People over 65 bring with them higher risks of hospital-related incidents, such as falls or pressure injuries. When these incidents occur in this age cohort, they will be typically more serious in nature, will take longer to resolve, and may prove more costly. In general, the Australian population is seeing an increase in risk factors related to lifestyle and obesity. Consequently, co-morbidities are on the rise, with this impacting on the risk profile of over 65s at a rate higher than has been recorded before.

Another consequence of an increased ageing population is the fact that many of them are in the clinical workforce, which is also ageing. “In our workforce we’ve got a whole bunch of really experienced nurses who are due to retire in the next 10 years. These nurses will be replaced by a less experienced workforce, for example, nurses with two or three years’ experience,” Hyam says.

She also notes that the over 65s who have health insurance policies are highly likely to use them—with the result that health insurance funds will be looking to negotiate their pricing models with hospitals in order to offset the shift in costs.

“Health funds and government funding bodies are starting to look at ways to apply pressure to private health providers to get better at what they’re doing, particularly in respect of safety and the quality of care they provide,” she says.

“Health funds may seek to adopt quality-based pricing models including key performance indicator (KPI) requirements and limits based on safety and quality of care, or they may elect to pay for services based on the average cost weight for the service, regardless of complexity or length of stay and so on.”
Hyam expects that, as in the US, health insurance companies will soon refuse to foot the bill for the treatment of injuries sustained while a patient is in hospital—a broken hip as a result of a fall on the way to the bathroom, for instance.

“As risk managers, we need to understand what’s happening in the US and the impact of that,” she says. “There, funding based on the quality and standard of care has been largely implemented. If the health fund isn’t paying you for poor patient care or poor patient outcomes, then one might assume that it’s easy to approach hospital executives and say that if they put certain safety mechanisms in place, then their patients won’t be harmed and the hospital won’t be left picking up the costs for those patients’ care.”

However, she notes that the incident rate in the US is not dissimilar to the incident rate in Australia, even though healthcare facilities in the US have a wide variety of safety mechanisms in place.

“Safety is a relatively easy cost benefit argument in the US but it doesn’t seem to be working, and that’s something I find extremely interesting. One might assume that embedding the safety message and culture from the top, added to the financial upside, would change how risk is managed in health, but clearly this is not enough.

“This is why I think we need to start ramping up the ERM model, where it’s not so much about the risk manager going in and telling everybody what to do but getting staff to take ownership. It’s driving home to them that they will be managing risk instead of managing incidents.”

SAFETY AND QUALITY

Another hot topic for healthcare risk managers in Australia is the new National Safety and Quality Health Service (NSQHS) standards that have been introduced by the Australian Commission on Safety and Quality in Health Care (ACSQHC) to drive the implementation and use of safety and quality systems and improve the quality of health service provision in Australia.

The major bodies who evaluate these standards are indicating a strong focus on risk and quality improvement cycle. In other words, you have to demonstrate that you understand the risk and how it is controlled and that the improvements you put in place are evidence-based and will yield results.

As she adjusts to her evolving role, Hyam is keen to make contact with risk managers in other countries to learn from the challenges they face.

“I went to the ASHRM conference last year and it was such a valuable exercise for me to meet people who work in risk in the US and also just to see that they’ve got all the same problems that we have,” she says.
“I think a more international approach to healthcare risk management would be valuable. Being able to see what everybody else is doing, driving a consolidated and consistent view on what the measures should be, international benchmarking for quality and safety, what’s worrying risk managers everywhere else, and whom I could contact if I needed to ask about on a particular situation, would be really helpful.

“At the end of the day, if you’re in private health, you’re competing with other private health providers, and networking with colleagues globally would be of great benefit!”