Liability

Nursing Home Downfalls: What Happens When Evacuations Are Delayed

For facilities entrusted with the lives of vulnerable populations, emergency preparedness plans are complex documents that never stop evolving.
By: | December 14, 2017 • 9 min read

A nightmarish scene unfolded in Port Arthur, Texas, after Hurricane Harvey. Law enforcement and volunteer teams forcibly evacuated a flooded nursing home that waited too long past the window of opportunity to launch a safe evacuation.

Advertisement




Not even two weeks later, amid the chaos of Hurricane Irma, another crisis was brewing at a nursing home in Hollywood Hills, Fla. This time though, help didn’t arrive in time. Eight vulnerable residents died after a few days in the sweltering facility with no power. Six more died of related complications in the weeks that followed.

The latter facility has since been shut down, and the operators of both facilities are facing serious scrutiny from law enforcement as well as regulatory agencies. It’s no surprise multiple lawsuits are already in process.

Yet neither of these incidents is entirely isolated. There are long-term care facilities across the country that, in the event of a disaster, could be one questionable decision or one poorly executed procedure away from finding themselves publicly pilloried.

Crisis management in skilled nursing facilities and long-term care facilities is an incredibly complex endeavor that takes the cooperation of risk management, the executive suite, vendors, suppliers and community partnerships.

Fortunately, there are a great many resources available to help nursing and long-term care facilities ensure their ability to protect patients and residents as well as staff members.

The Plan’s the Thing

The Centers for Medicare & Medicaid Services (CMS) published an updated rule in 2016, “Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers.” Health care providers, including nursing and long-term care facilities, were required to be in compliance with the new rule as of Nov. 15 of this year.

Diane Doherty, senior vice president, Chubb Healthcare

So while facilities already had disaster plans in place, CMS set the bar a notch higher and formalized certain aspects of emergency preparedness planning for the health care industry.

“Without a doubt the rule represents new challenges to long-term care organizations due to the sheer amount of work related to complying with the regulation and the preparation involved,” said Diane Doherty, senior vice president, Chubb Healthcare. But Doherty said she feels confident that most facilities were able to meet the Nov. 15 deadline.

Still, there can be a significant gap between a facility that’s meeting minimum compliance requirements and a facility that’s genuinely ready to weather a storm or a sudden fire.

The foundation of a strong preparedness plan, experts agree, is a comprehensive hazard vulnerability assessment, or HVA, which looks at every type of emergency or disaster a facility might face and carefully addresses how each scenario might impact a location’s ability to keep its residents and employees safe, both during an emergency and in the days and weeks that follow.

The assessment helps pinpoint the services a facility will need by “identifying residents who require additional assistance — the wheelchair-bound, the bed-bound, the residents on ventilators,” said Doherty. This includes residents with dementia as well as those who simply need assistance ambulating.

“If you didn’t ask the right questions and don’t have the right information, it is hard to make a decision about the patient lives that are in your building.” — Scott Aronson, Director, Strategy & Business Development – Healthcare, RPA

Assessment best practices should include the help of community partners such as law enforcement and local emergency management and health department officials, said Scott Aronson, Director, Strategy & Business Development – Healthcare for RPA, a JENSEN HUGHES Company. RPA is an emergency management firm and technology provider serving the health care industry.

By engaging community resources, said Aronson, “you will at least know what they feel the threat is to your buildings and to your patients and to your infrastructure — of either getting resources in to you or getting you out of there — or whether your building will be able to stand up to the hazards.”

The quality of the assessment is key, said Aronson, because that information will help prioritize planning and support how decisions will be made during a crisis.

“If you didn’t ask the right questions and don’t have the right information, it is hard to make a decision about the patient lives that are in your building.”

Advertisement




For the same reason, said Aronson, organizations can’t expect their state or local government to tell them what to do in a crisis. Municipalities aren’t typically inclined to order an evacuation except in extreme situations. It’s up to each facility’s incident command team to make decisions based on the information directly in hand.

Whether the decision in the moment is to shelter-in-place or evacuate, an organization’s vendor and supplier network is a significant piece of the emergency planning puzzle.

Transportation arrangements and sheltering agreements with receiving facilities must be in place in the event of an evacuation. Fuel, water and other supplies may be needed in other circumstances. Getting it right often means having a plan B — or even a plan C.

Risk managers need to look at the larger picture — their primary and contingency vendors as well as their vendors’ contingency arrangements.

“If your fuel supply is local, for example, then do you have a contingency? Are they part of a national company where they have other resources they can bring in from other locations?” said Rick Maltz, senior director of resident services and risk management at Erickson Living, home to more than 24,000 seniors in 11 states.

Marcia Price, Erickson Living’s vice president of operations and risk management, added, “Sometimes it is necessary to make a judgment call when determining the right contract partner. You may see a vendor and it seems great — maybe the pricing’s a little lower. But if it’s a local vendor, you have to think about [your contingency plan in] an emergency. It may be better to go with a national vendor who can always provide for you.

“However, if you’re going to use a local vendor, have a backup plan or a backup contract so that you give yourself some options.”

The drawback with back-up vendors though, Price cautioned, is if you’re not a high-use client, you may not be at the top of their priority list.

Having the right supplies in the right places is a strength of Erickson’s. As Hurricane Sandy bore down on the Northeast, Erickson trucked fuel in from Florida and kept the truck parked at one of its facilities.

When nobody else in the area had fuel, they were able to keep the facility’s generator topped off and also provided fuel for employees’ cars.

New approaches are being developed that can significantly expand options for facilities and organizations of every size. More than 1,000 southern New England facilities signed on to Mutual Aid, a technology platform developed by RPA. The platform is designed to enable facilities to support each other in the event of a disaster.

Mutual Aid is a powerful tool to amplify the resources of every member facility. “They will actually deploy each other’s vendors to help the other,” explained RPA’s Aronson. “Or they’ll send their own resources and assets to help the other.”

Even for large corporate groups, such a network of support can play a massive role in terms of rapid response. A hurricane enables the advance deployment of resources, but most other disasters don’t.

“A lot of the other things corporate groups may just not be prepared for — tornadoes, earthquakes, wildfires — you can’t just plop resources down in the middle of that,” said Aronson. “You have to rely on existing partnerships in the community, in the region, and in the greater state to help you out.”

Continuous Improvement

Training and testing of the emergency preparedness plan is essential. It’s never enough to just tick off a checklist, experts agree.

“You can check the boxes pretty easily, but did you actually learn anything? And will it benefit you in the future?” said Aronson. “It’s critical that they really do it and not just go through the 10-minute motions. They have to learn from that exercise and improve their plans and training going forward.”

Marcia Price, vice president of operations and risk management, Erickson Living

At Erickson Living, disaster preparedness messages are woven into the company’s broader safety education program, including department-specific safety talks, monthly town hall meetings and annual compliance training.

But it’s the drills that really test both the plan itself and each facility’s ability to execute it successfully.  Drills simulate how each person might react under the pressure of a real-life crisis and help identify opportunities for improvement.

“It really helps [the facilities] train their teams on what is expected. We think that’s an important piece of being able to train people on how you handle an emergency,” said Price.

In addition, she said, it’s a chance to work with local emergency responders and solidify those relationships and expectations long before a crisis occurs.

Both Maltz and Price said that each drill and each actual incident help identify gaps. Any unexpected wrinkle is an opportunity to update the plan in order to be better prepared for the next event. “A couple of the things we learned from Harvey we took to Irma,” noted Maltz.

Price added, “Our program is based on continuous learning; it’s not an annual event because this is a living document, and we keep updating it and we keep making sure that we’re improving on it.”

Free Resources

From a coverage perspective, property and business interruption policies are essential for nursing and long-term care facilities, as are workers’ comp, medical professional liability, general liability and D&O.

But carriers have more to offer their long-term care clients, said Doherty.

Advertisement




“I think it’s important for [long-term care facilities] to partner with a carrier that’s going to help them meet these challenges head on, whether it’s assisting with conducting the risk assessment or providing education to their staff,” she said.

There’s a wealth of other resources out there for organizations to avail themselves of, and much of it is free.

The Nursing Home Incident Command System (NHICS) was developed in California and can be downloaded for free, said Aronson. It’s one of a large trove of free resources found at ASPR TRACIE, a double-whammy acronym for the Assistant Secretary of Preparedness and Response and Technical Resources, Assistance Center and Information Exchange.

Other free materials can be found on the websites of FEMA and the department of Health and Human Services. Numerous professional associations as well as state and federal websites offer free resources to help meet the latest CMS requirements.

“Long-term care facilities are under constant pressure to do more with less,” said Doherty. “Those that prepare and practice and train for that inevitable catastrophe — they really reduce the chances of debilitating losses while strengthening their ability to safely care for this fragile and vulnerable population.” &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The End of Summer

A failure to purchase product contamination insurance results in a crushing blow.
By: | October 15, 2018 • 9 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: THE HEAT IS ON

Reilly Sheehan, the Bethlehem, Pa., plant manager for Shamrock Foods, looks up in annoyance when he hears a tap on his office window.

Reilly has nothing against him, but seeing the face of his assistant plant operator Peter Soto right then is just a case of bad timing.

Sheehan, whose company manufactures ice cream treats for convenience stores and ice cream trucks, just got through digesting an email from his CFO, pushing for more cost cutting, when Soto knocked.

Sheehan gestures impatiently, and Soto steps in with a degree of caution.

“What?” Sheehan says.

“I’m not sure how much of an issue this will be, but I just got some safety reports back and we got a positive swipe for Listeria in one of the Market Streetside refrigeration units.”

Partner

Partner

Sheehan gestures again, and Soto shuts the office door.

“How much of a positive?” Sheehan says more quietly.

Soto shrugs.

“I mean it’s not a big hit and that’s the only place we saw it, so, hard to know what to make of it.”

Sheehan looks out to the production floor, more as a way to focus his thoughts than for any other reason.

Sheehan is jammed. It’s April, the time of year when Shamrock begins to ramp up production for the summer season. Shamrock, which operates three plants in the Middle Atlantic, is holding its own at around $240 million in annual sales.

But the pressure is building on Sheehan. In previous cost-cutting measures, Shamrock cut risk management and safety staff.

Now there is this email from the CFO and a possible safety issue. Not much time to think; too much going on.

Sheehan takes just another moment to deliberate: It’s not a heavy hit, and Shamrock hasn’t had a product recall in more than 15 years.

“Okay, thanks for letting me know,” Sheehan says to Soto.

“Do another swipe next week and tell me what you pick up. I bet you twenty bucks there’s nothing in the product. That swipe was nowhere near the production line.”

Soto departs, closing the office door gingerly.

Then Sheehan lingers over his keyboard. He waits. So much pressure; what to do?

“Very well then,” he says to himself, and gets to work crafting an email.

His subject line to the chief risk officer and the company vice president: “Possible safety issue: Positive test for Listeria in one of the refrigeration units.”

That night, Sheehan can’t sleep. Part of Shamrock’s cost-cutting meant that Sheehan has responsibility for environmental, health and safety in addition to his operations responsibilities.

Every possible thing that could bring harmful bacteria into the plant runs through his mind.

Trucks carrying raw eggs, milk and sugar into the plant. The hoses used to shoot the main ingredients into Shamrock’s metal storage vats. On and on it goes…

In his mind’s eye, Sheehan can picture the inside of a refrigeration unit. Ice cream is chilled, never really frozen. He can almost feel the dank chill. Salmonella and Listeria love that kind of environment.

Sheehan tosses and turns. Then another thought occurs to him. He recalls a conversation, just one question at a meeting really, when one of the departed risk management staff brought up the issue of contaminated product insurance.

Sheehan’s memory is hazy, stress shortened, but he can’t remember it being mentioned again. He pushes his memory again, but nothing.

“I don’t need this,” he says to himself through clenched teeth. He punches up his pillow in an effort to find a path to sleep.

PART TWO: STRICKEN FAMILIES

“Toot toot, tuuuuurrrrreeeeeeeeettt!”

The whistles of the three lifeguards at the Bradford Community Pool in Allentown, Pa., go off in unison, two staccato notes, then a dip in pitch, then ratcheting back up together.

For Cheryl Brick, 34, the mother of two and six-months pregnant with a third, that signal for the kids to clear the pool for the adult swim is just part of a typical summer day. Right on cue, her son Henry, 8, and his sister Siobhan, 5, come running back to where she’s set up the family pool camp.

Henry, wet and shivering and reaching for a towel, eyes that big bag.

“Mom, can I?”

And Cheryl knows exactly where he’s going.

“Yes. But this time, can you please bring your mother a mint-chip ice cream bar along with whatever you get for you and Siobhan?”

Henry grabs the money, drops his towel and tears off; Siobhan drops hers just as quickly, not wanting to be left behind.

Advertisement




“Wait for me!” Siobhan yells as Henry sprints for the ice cream truck parked just outside of the pool entrance.

It’s the dead of night, 3 am, two weeks later when Cheryl, slumbering deeply beside her husband Danny, is pulled from her rest by the sound of Siobhan crying in their bedroom doorway.

“Mom, dad!” says Henry, who is standing, pale and stricken, in the hallway behind Siobhan.

“What?” says Danny, sitting up in bed, but Cheryl’s pregnancy sharpened sense of smell knows the answer.

Siobhan, wailing and shivering, has soiled her pajamas, the victim of a severe case of diarrhea.

“I just barfed is what,” says Henry, who has to turn and run right back to the bathroom.

Cheryl steps out of bed to help Siobhan, but the room spins as she does so.

“Oh God,” she says, feeling the impact of her own attack of nausea.

A quick, grim cleanup and the entire family is off to a walk-up urgent care center.

A bolt of fear runs through Cheryl as the nurse gives her the horrible news.

“Listeriosis,” says the nurse. Sickening for children and adults but potentially fatal for the weak, especially the unborn.

And very sadly, Cheryl loses her third child. Two other mothers in the Middle Atlantic suffer the same fate and dozens more are sickened.

Product recall notices from state regulators and the FDA go out immediately.

Ice cream bars and sandwiches disappear from store coolers and vending machines on corporate campuses. The tinkly sound of “Pop Goes the Weasel” emanating from mobile ice cream vendor trucks falls silent.

Notices of intent to sue hit every link in the supply chain, from dairy cooperatives in New York State to the corporate offices of grocery store chains in Atlanta, Philadelphia and Baltimore.

The three major contract manufacturers that make ice cream bars distributed in the eight states where residents were sickened are shut down, pending a further investigation.

FDA inspectors eventually tie the outbreak to Shamrock.

Evidence exists that a good faith effort was underway internally to determine if any of Shamrock’s products were contaminated. Shamrock had still not produced a positive hit on any of its products when the summer tragedy struck. They just weren’t looking in the right place.

PART THREE: AN INSURANCE TANGLE

Banking on rock-solid relationships with its carrier and brokers, Shamrock, through its attorneys, is able to salvage indemnification on its general liability policy that affords it $20 million to defray the business losses of its retail customers.

Advertisement




But that one comment from a risk manager that went unheeded many months ago comes back to haunt the company.

All three of Shamrock’s plants were shuttered from August 2017 until March 2018, until the source of the contamination could be run down and the federal and state inspectors were assured the company put into place the necessary protocols to avoid a repeat of the disaster that killed 3 unborn children and sickened dozens more.

Shamrock carried no contaminated product coverage, which is known as product recall coverage outside of the food business. The production shutdown of all three of its plants cost Shamrock $120 million. As a result of the shutdown, Shamrock also lost customers.

The $20 million payout from Shamrock’s general liability policy is welcome and was well-earned by a good history with its carrier and brokers. Without the backstop of contaminated products insurance, though, Shamrock blew a hole in its bottom line that forces the company to change, perhaps forever, the way it does business.

Management has a gun to its head. Two of Shamrock’s plants, including Bethlehem, are permanently shuttered, as the company shrinks in an effort to stave off bankruptcy.

Reilly Sheehan is among those terminated. In the end, he was the wrong person in the wrong place at the wrong time.

Burdened by the guilt, rational or not, over the fatalities and the horrendous damage to Shamrock’s business. Reilly Sheehan is a broken man. Leaning on the compassion of a cousin, he takes a job as a maintenance worker at the Bethlehem sewage treatment plant.

“Maybe I can keep this place clean,” he mutters to himself one night, as he swabs a sewage overflow with a mop in the early morning hours of a dark, cold February.

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Swiss Re Corporate Solutions to produce this scenario. Below are their recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

Shamrock Food’s story is not an isolated incident. Contaminations happen, and when they do they can cause a domino effect of loss and disruption for vendors and suppliers. Without Product Recall Insurance, Shamrock sustained large monetary losses, lost customers and ultimately two of their facilities. While the company’s liability coverage helped with the business losses of their retail customers, the lack of Product Recall and Contamination Insurance left them exposed to a litany of risks.

Risk Managers in the Food & Beverage industry should consider Product Recall Insurance because it can protect your company from:

  • Accidental contamination
  • Malicious product tampering
  • Government recall
  • Product extortion
  • Adverse publicity
  • Intentionally impaired ingredients
  • Product refusal
  • First and third party recall costs

Ultimately, choosing the right partner is key. Finding an insurer who offers comprehensive coverage and claims support will be of the utmost importance should disaster strike. Not only is cover needed to provide balance sheet protection for lost revenues, extra expense, cleaning, disposal, storage and replacing the contaminated products, but coverage should go even further in providing the following additional services:

  • Pre-incident risk mitigation advocacy
  • Incident investigation
  • Brand rehabilitation
  • Third party advisory services

A strong contamination insurance program can fill gaps between other P&C lines, but more importantly it can provide needed risk management resources when companies need them most: during a crisis.



Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]