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Healthcare for Your Facilities

April 1, 2006
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Devising a facility maintenance "care plan" by David S. Osborn, JD
BY DAVID S. OSBORN, JD Healthcare for your facilities
Developing and maintaining a care plan for your facilities and equipment is critically important to organizational value
The quality of healthcare does not stop with your residents; it extends to the facilities housing them. While long-term healthcare organizations take great pains to identify and use the latest systems to monitor the health of their resident-patients, little has changed over the years in the practice of monitoring and maintaining the health of their portfolio facilities. This attitude ignores the balance sheet. A quick look at the 2004 financial statements of six large U.S. public long-term care chains reveals that on average, more than 50% of their overall market capitalization lies in their property, plant, and equipment-far too large a percentage to ignore.1

The care and feeding of your physical assets is as critical to organizational value as the healthcare provided to the human assets comprising your customer base. Both require your full attention and an equal commitment. This article will help you gauge your facility care plan and suggest new ways to improve it.

The Price of Poor Maintenance
Inadequate physical plant maintenance and monitoring will lead to deteriorating buildings, inoperable and unavailable equipment, increased repair costs, increased risk exposure for regulatory and civil liability, and a host of additional headaches. A single event can be disastrous for your facility and to your organization. All are costly and all can be avoided.

Minor facility-related incidents resulting from improper facility conditions such as slip and fall accidents, intruder-related injuries, and injuries resulting from inoperable or poorly maintained equipment may not make your blood chill, but your bottom line may limp for years to come. Simple accidents can cause serious injury and can lead to more than minor cuts and bruises for those who land on hard surfaces and suffer fractures and strains.

Consider a $2.8-million verdict collected by a guest who tripped near the threshold of a nursing home and permanently injured his back; a $210,000 award to a nursing home resident who fell and broke her hip because of an improperly maintained walker; a $175,000 award to a woman who injured her foot when the facility permitted a manual door to remain in an unsafe condition; a $70,000 recovery when a plaintiff slipped and fell on a chronic wet spot; and a $210,000 award when a nurse was injured because the nursing home had negligently failed to repair a long-standing pothole in the parking lot.

The fundamental question underlying a cause of action related to your facility or equipment (premises liability) is whether the condition causing the accident was unreasonably dangerous and could have been avoided. Premises liability is a broad legal term that denotes many types of events relating to your building and grounds, including structural design flaws, unsafe physical conditions, environmental hazards, improperly maintained equipment, improper movement patterns, and a range of other issues involving negligence.

According to a 1998 report by Jury Verdict Research, The 5 Myths of Nursing Home Litigation, premises liability accounts for 8% of all long-term care liability cases. Furthermore, plaintiffs have a recovery probability of over 50% in nursing home cases compared with approximately 30% for medical malpractice cases. The median verdict for nursing home negligence approaches $200,000 and can rise to $13 million when the verdict includes compensatory damages. Punitive damage awards accompanied 19% of all plaintiff verdicts with a median award of $900,000.

Beyond liability and risk is diminished facility value borne out of improper maintenance. When it comes time to borrow cash, to sell your facility, or to market your services to new clients, facility condition is an integral component of the audience's perceived value. Consider how a complete record of facility maintenance would add to a buyer's or a client's positive perception of care.

Simply having equipment data at your fingertips will save you money. One recently acquired organization with an Internet-based preventive maintenance system in place saved considerable time, effort, and expense when its acquirer asked for an inventory of current assets. Fortunately, a complete list of facility equipment, its current condition and, therefore, its approximate value was only a few clicks away.

Programmed Preventive Maintenance
Imagine a care plan for your facility. An effective facility maintenance program is no different-a comprehensive maintenance plan that ascribes to the old adage that an ounce of prevention is worth a pound of cure. It follows that a healthy facility will last longer and retain a higher value.