Sherry L. Brunner, CPHRM, NHA Vice President - Risk and Insurance Bon Secours Health System, Inc.

1. 2003 CAS Annual MeetingNursing Home Professional Liability Insurance Crisis - An UpdateBSHSI ‘s Experience Sherry L. Brunner, CPHRM, NHA Vice President - Risk and Insurance Bon Secours Health System, Inc. November 12, 2003

2. BSHSI Overview • The Sisters of Bon Secours came to the United States from Paris in 1881 to care for the poor, sick and dying in their homes in Baltimore, Maryland. In 1919 they opened the first Bon Secours Hospital in the United States in Baltimore. Over the years, they opened acute and long term health care facilities in other states, and in 1983 the Sisters of Bon Secours established the Bon Secours Health System, Inc. • Established 1983 • Acute-Care Hospitals 24 • Number of Acute Beds 5,360 • Nursing Care Centers 9 • Number of NCC Beds 1,600 • Assisted Living Facilities 8 • Assisted Living Facilities Beds 747 • Employees 27,000+ • System assets total $2.49 billion • Total System revenues $2.5 billion • Outstanding long-term indebtedness of $1.1 billion

3. BSHSI’s Mission and Vision • The Mission of Bon Secours Health System is to bring compassion to health care and to be good help to those in need, especially the poor and dying.As a System of caregivers, we commit ourselves to help bring people and communities to health and wholeness as part of the healing ministry of Jesus Christ and the Catholic Church. • Through our Mission, Values and Operating Principles, by the year 2006, Bon Secours Health System will be a leader in Catholic Health Ministry compassionately reaching beyond tradition to model justice and operating excellence, liberate the potential of people, and improve community health and well-being.

4. BSHSI’s Alternative Risk Financing Vehicle • BSHSI’s Alternative Risk Financing Vehicle is the Bon Secours Assurance Company or BSAC. • BSAC was chartered in Grand Cayman, BWI, in 1994. It originally provided HPL/GL occurrence coverage solely. BSAC was coverted to claims made coverage in 2002 and now covers large deductibles for D & O and Property Coverage in addition to HPL/GL.

5. BSHIS’s Risk and Insurance Department Structure

6. Department’s Goals • Develop a systematized proactive approach to reducing identified loss exposures; and • Apply the risk management process to increase patient and resident safety; and • Demonstrate the link between risk reduction strategies and the “bottom line.”

7. Department’s Area of Focus - Administrative Risks • Adopted or Implemented: • Policies and Procedures for: • Admissions, Discharges and Transfers • Communication • Surrogacy • Human Resources related • Marketing and Public Relations • An Administrator on Duty program

8. Department’s Area of Focus - Clinical Risks Adopted or Implemented: • “Best practices” including: • American Medical Directors Association’s Clinical Practice Guidelines (e.g. Falls, Pressure Sores) • AAHSA and AHCA identified “best practices”

9. Department’s Area of Focus - Clinical Risks (Continued) • Policies and procedures for all at risk clinical practices including falls, dehydration, pressure sores, elopement, abuse, restraint use, etc. • Clearly defined “Chain of Command”

10. Department’s Area of Focus - Emergency Related Risks • Adopted or Implemented: • A “Disaster Manual” which includes protocols for all potential disasters including weather related (e.g. Hurricane), utility related (e.g. Loss of Electricity), medical related (e.g. Code Response), and external (e.g. Bomb).

11. Department’s Area of Focus - Provider Related Risks • Adopted or Implemented: • A process for credentialing physicians and allied health professionals including orientation to policies and procedures • An Equipment Maintenance Plan • Contracts for all outside services including Nursing Agencies, Consultants (e.g. Pharmacists), etc.

12. Department’s Area of Focus - Regulatory Risks • Adopted or Implemented: • Concurrent quality reviews • Tracking and trending of incidents • “Mock Surveys” • Policies and procedures for areas impacted by regulation (e.g. Biohazardous Waste)

13. Department’s Area of Focus - Regulatory Risks (Continued) • Protocol for responding to Resident Complaints • Process for “managing survey”.

14. Conclusion In addition to those areas of risk outlined earlier, perhaps the greatest predictor of litigation is the patient, resident and family member (s) customer satisfaction survey results. A happy patient, resident and family member makes it easier when the time comes to disclose a “bad outcome.”