The Purpose of Risk Management

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Risk Management


The considered facility is one of those managed by the Selwyn Foundation. Kerridge Rest Home is located at the Selwyn Village Retirement Complex, 43 Target St., Point Chevalier, Auckland. Kerridge is a 61 bed capacity rest home with a good view of the area’s beaches. Just recently it has opened its doors to hospital level care residents in addition to the rest home residents that they have had over the years.

Purpose of Risk Management:

In a healthcare facility, there are a number of risks that both the staff and the residents are exposed to daily. It will also be a measure to identify the present hazards and the possible hazards present. In general, risks are part of daily the activities and no one can get away, risk management is does not aim in eradicating the risks but rather minimize these risks and the effects of it, thus, preventing greater unfavourable events and situations. In an organization risk management is important so to avoid conflicts between staff and residents as well as conflicts with the family or significant others.

In entirety, the purpose of risk management in healthcare is to enhance patient care and safety and promote security for everybody in the facility at the same time abiding with the legal requirements of the government.

Benefits of Risk Management:

When there is effective risk management at the facility, there will be a sense of security among the residents and the staff and a level of safety is achieved. Like for example at the facilities under the Selwyn foundation there is a good and visible fire alarm system. Smoke detectors are installed around the facilities, evacuation information in event of fire are posted in the bulletin board of every resident rooms as well as in corridors and lounges. Respective exits are also properly labelled and fire extinguishers are kept in an accessible spots. When all these are visible and information are properly disseminated then a sense of security is felt by the staff and residents knowing that in event of fire they will be properly guided on what to do.

Risk Management will also help in the identification of hazards that may be avoided or given attention to before any accident may happen. To site an example, in the facility there are railings along the corridors as well as in toilets, this will help residents in keeping their balance and therefore prevent possible falls. Another example will be that of installing fire detectors and alarm system, this gadget will help detect fire before it will escalate and sends the alarm for everyone to evacuate and the fire department to be informed before it will be too late.

Another benefit of having an effective risk management is meeting up with regulatory compliance and having accreditation from these regulatory institutions. The accreditations given to the facility is one indication that the facility is a safe place for the elderly to dwell in and that Kerridge is maintaining the standards of care as well as equipped with a competent and knowledgeable staff able render efficient and quality care to the elderly.

Risk management components and its relations to overall risk management role:

  1. Activities and Internal Environment

At Kerridge Rest Home, residents are allowed to have outdoor gardening activities, although this type of activity may be good for the residents in order for them to breathe in fresh air this may also pose as an accidental hazard for other residents using a walker. Given that activity is outdoors, the garden does not have railings around the area so when residents get out of balance, they may be subjected to a greater degree of injury.

The facility also has a diverse community of staff and residents. The care staff is composed of Indian, Fijian, Filipino, Samoan among others and residents are European, Kiwi, Dutch therefore there would be the risk for miscommunication. The residents may sometimes have the difficulty in understanding the care givers depending on the accent or way of talking of care givers and nurses and vice versa.

  1. Setting Objectives

During the morning shifts at Kerridge, which starts from 7am to 3pm, the care givers are expected to shower/wash and dress their residents and have them ready for scheduled activities and get them ready for lunch with some rest in between. The staff starts the shift with a hand over to know any changes in the activities of the residents such as hospital visits, having tea or lunch outside with the family or a physiotherapy schedule. Then they allot about 30 minutes for every resident to do the cares so that by lunchtime, residents are well dressed and ready for their meal.

Another objective at Kerridge is to prevent the residents from falling during the working shift. This is prevented by having restraints put on the residents and routinely checking on the residents to maintain the level of safety in the facility.

  1. Event Identification

Identified Risks at Kerridge Rest Home are grouped into categories:

Health risks includes infection, the risks for residents' injury related to fall, the risk for bed sores for hospital level care residents, the risk of skin rashes due to incontinent pads.

Another category of risks is that of infrastructure which includes, fire and lightning, slips or fall due to slippery flooring, risk for dehydration due to centralized heating system.

Belonging to the Staff Risks, we have risk for understaff in cases when they are on sick leave, the risk for miscommunication considering that the care giving team are composed of different nationalities.

IT category would include the risk to privacy related to hacking making private information about residents available to the hacker, the risk of data being deleted due to system breakdown. The record for the employees working hours may also not be accurate when the biometric system is not working.

  1. Risk Assessment

As stated above, a month or so ago Kerridge Rest home has welcomes its doors to hospital level care residents and so this has given rise to the probability of 50% for the existing rest home residents to feel neglected by the care givers.

In every rest home, especially with hospital level care residents there is a high risk with a probability of 80% of the care givers to have back injury considering the degree of physical involvement they have in the care of their residents just like lifting the residents. In most cases, hospital level care residents are physically incapable to stand on their own making it a need for care givers to make use of a mechanical lifting device or the hoist. When employees have a back injury and would not be fit to do the residents care, this would mean that they should file for a sick leave thus this would result to insufficient number of staff for a shift. The Selwyn management would then have to search for n available healthcare assistant to fill in the shift from other bureaus, requiring more time and money for the management. This would at the same time have an impact on the care rendered to the residents for a permanent employee is more knowledgeable about the residents than those working for the bureau.

At kerridge, the residents are mostly in their 80s and 90s with a few over 100 years old so they are more susceptible to fall, with a probability of 80-90%. When such incidents happen this would mean more job for the nurses because they would have to fill out forms and incident reports in order make this incident made known to the management.

At Kerridge rest home or any rest home for that matter, residents have a 50-70% probability of feeling lonely considering that they are away from their family and even their homes and also might feel a sense of helplessness because of their mobility limitations and frail health.

  1. Response Plan

As a response to the feelings of loneliness of the new residents, the management made it a point that they be given the same routine of care as that of their previous home. In this manner, the residents may not feel alienated. They were also encouraged to join the activities of the other rest home residents and family members are encouraged to visit the residents.

Pertaining to the risk of the residents feeling neglected, the management increased the number of staff. In this way there is enough number of staff to care for the residents and the ratio of care giver to staff is maintained therefore care givers still have ample to do their cares efficiently and maintaining the standards of care.

Mechanical lifts (hoists) were also made use in the facility in caring for hospital level care residents in order to lessen the physical strain on the care givers when rendering care as well as the use of the sliding sheets.

  1. Control Activities

Since there is a high risk for care givers to have back injury with the nature of their job like positioning the resident in bed, transferring and lifting the resident from and to the bed or wheelchair, the facility has made use of equipment or materials that would help in reducing the risk of back injury. The use of sliding sheet makes it easier for the caregiver to move the patient in bed thus lessening the physical strain on the care giver. The benefit of using the hoist does the same, less strain on the caregiver.

As of the risk of fall for rest home residents, this is controlled through the use of walker at all times, as well as the installation of hand rails throughout the corridors and toilets. The use of restraints also prevents the residents from falling from their wheelchairs or chairs. Bed rails are also put up the whole night to prevent falls at night.

The risk for miscommunication among staff and residents can also be reduced by setting a rule for everyone to speak English at all times. The accents may differ but at least when we use the same language in the entire facility then residents and staff may reach a certain level of understanding especially when communication is the issue. Another way to lessen miscommunication is with the use of the memo board, in here the residents may have their preferences written

  1. Monitoring

At Kerridge the management and staff have a monthly meeting in order for everyone to have a view of how things are doing at the Rest Home. The residents also have a regular check-up schedule done by a doctor, in this way, their overall health may be monitored. Like for example, doctors will assess if the residents are still responsive to their maintenance medication, if it is not the case, then they can prescribe another type of medication with continuous monitoring. This may also help the management and the care givers to monitor the progress of the residents’ health, whether there health maintenance, deterioration or progress,

During scheduled staff meeting, everyone is given the opportunity to air out their concerns regarding the facility, the staff as well as the residents or even the nature of their job. This is a way to monitor how the care givers are coping up with the demands of their work.

In order to render efficient and quality care, designated staff also make an inventory of the available supplies in the facility, this way they have an updated idea of what important things are needed like pads, skin cream, milk, sugar, juice, etc. The items are necessary and needed in the facility and the staff make it sure that there if enough of it for the residents to use.

  1. Information and Communication

When there was the plan to bring in Hospital level care residents into Kerridge Rest home, the management made the information known to the staff through staff meeting, during such time, the employees were given an overview of the changes that would take place once the new residents would arrive. They were also given the time to air out their concerns so that the management can address it. After the right information has been disseminated to the staff, the management then prepared a memo or letter that was distributed to every resident. The letter consisted of information regarding the event that would happen, the time when new residents will be coming in, as well as the number of residents joining the facility.

Group Work Assessment:

Business risk

Buying an existing pharmacy and renaming it might be both a risk and a benefit for the business. It might be true that buying a pre-existing pharmacy may be beneficial for the business, the reason behind this might be that existing clients already know the location of the pharmacy and they may continue to get their prescriptions from the same place but regardless if the business has been renamed. But on the other hand renaming it might be a risk, pre-existing customers might continue to patronize the pharmacy even with a new name if they have had good experiences with the previous management or they might not want to continue buying from the pharmacy with its new name having the notion that they might not be given the same treatment or experience with the previous management.

Open 24 hours may be risk that there might not be any sales during late hours of the day considering that most of the people are already in their homes and would not be out late. Another thing to consider is the risk for robbery, when it is late at night there are a few if not no one around the area thus making it possible for a robbery to happen thus, putting the business at risk as well as the lives of the employees.

Spending $50,000 for full re-image for a more international feel is another risk. Giving the business this kind of feel may welcome tourists, which is one of the prospect groups of customer but where international customers are comfortable on the other hand this might be the same reason preventing the city apartment tenants and commuters to visit the pharmacy thinking that the pharmacy is selling only imported goods.

Insurance risk

Since most of the products being sold in the pharmacy are mostly related to health then the business should have a liability insurance, this would give protection to the business should any employee or products cause or is alleged to have cause bodily injury or property damage to a third party.

A Workers’ Compensation Insurance (ACC) covers the expenses of the employees should they be injured at work. This will also provide wage replacement and medical benefits to the injured employee. This type of insurance also protects the employer if sued by the injured employee should they claim that you did not provide a safe working place.

Fire Insurance is the policy that covers all or part of the losses that was the result of fire or lightning. As a security for the establishment, there should be proper fire exit and extinguisher available.

Since the pharmacy is at high risk for robbery, burglary or theft then they should have a crime insurance which would cover all the losses from these incidents. For the pharmacy’s security then it would be beneficial for the establishment to install Closed-circuit television (CCTV).

Since a pharmacy business deals with medications so it is must that we also put into consideration human errors such as dispensing the wrong medication or mistakenly labelling the medication, there might also be instances that customers might ask for any side effects of a certain drug and the staff may not be expected to know all the possible side effects. This policy protects the pharmacy from lawsuits resulting to human error.

Since the business is owned by 3 shareholders, the Business Life Insurance will protect the business should there be any death among the shareholders. The policy will provide the other partners to with the needed fund in order to buy the deceased’s share of the business, preventing them from taking out loans or selling the share of the deceased to unacceptable partner.

Compliance risk

There are a set of regulations that should be put into consideration in order to have the necessary approval from the designated council in order to put up a business. In this case, a pharmacy business is what is being considered.

Since the business is for directed to tourist and city dwellers clientele, there is the must that all the products and items that they have in the shop should comply with the standards set by Medsafe, the New Zealand Medicines and Medical Devices Safety Authority, in order to ensure that their products are reasonable safe.

The building structure should also comply with the Building Act (2004) which is administered by Department of Building and Housing (DBH), if the business is in a multiple level or storey building then the building should be durable enough, with its building materials not a fire hazard and with proper fire exit.

The business must also comply with the health and safety in employment act of 1992, providing the employees are healthy and safe working environment. This applies to every employee of the pharmacy, permanent or temporary, casual, part-time or full-time. How they arrange or display their products would also be of consideration, there should be enough pathway in events for fire. A good fire alarm system should also be considered. Fire exits should be visible and accessible as well.

Another issue that is to be considered in the business is the wage or salary for the employees. Thought the business has started with high expenses put into renovation, they should comply with the minimum wage act of New Zealand. Employees must be given the due wage that they deserve, starting the wage at minimum rate for an adult which is $14.25 per hour


  • Dennis H. Tootelian, Albert I. Wertheimer, Andrey Mikhailitchenko. Essentials of Pharmacy Management. Pharmaceutical Press, 2012.
  • Iverson, David. Strategic Risk Management. A Practical Guide to Portfolio Risk Management. John Wiley & Sons Singapore Pte. Ltd., 2013.