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Hospitals are loaded with consumable goods one could use around the home. Those goods include toner and paper for your home computer, food products, medications (controlled and over-the-counter), and linen products, just to name a few. There are also many big ticket items also. These items include medical equipment (endoscopy equipment and portable electro cardiogram devices), computers, and floor buffers. Almost every department has something to offer the discriminating shopper. In fact hospitals are very much like a large Department Store except there is no checkout counter. There are, however, numerous unattended doors. Most hospitals have departments that deal in cash such as gift shops, pharmacies and cafeterias. Hospitals deal with patient valuables on a daily basis.
There is no question that all of the aforementioned items plus several thousands of items not mentioned walk out numerous hospital doors on a daily basis. The question then becomes How much of this stuff is walking? The answer is: Most hospitals do not know. In fact one of the reasons things walk is because the perpetrators (mostly employees) know their crime will mostly likely go unnoticed and undetected. If the theft is noticed, it will most likely go uninvestigated.
Many hospitals, in an attempt to monitor overhead and expenses track cost-per-patient-day ratios on a departmental basis. The problem with this statistic is that it generally does not identify theft and fraud unless the theft and fraud is massive. Typically cost-per-patient-day ratios are compared to, by and large, to ill-defined industry standards. The trouble with this comparison is that the statistic does not ferret out real shrinkage, and additionally this comparison accepts and acquiesces to undefined shrinkage across the board. In other words, hospitals are ostensibly acquiescing to a yet undefined level of theft and fraud.
Lets examine another component of this phenomenon. Lets compare hospital security programs with the security programs of other industries. Consider the security programs of such industries as retailing, hospitality, manufacturing, transportation and warehousing. Many of these industries find shrinkage rates in excess of 1% to 3% unacceptable. What is the comparative value that these industries, and many more, place on their security and loss prevention programs? It is hard to find objective information on this subject. However there is information available within the security industry regarding the comparative salaries paid to security personnel within various industries such as those previously mentioned. Let us assume that those industries that pay security personnel top dollars put a higher value on the security function than those industries that pay security personnel substantially less.
That information begins to tell the story. Hospital security personnel, including hospital security managers, are among the lowest paid of any other industry. The question becomes: Why? The answer is complicated. Do hospitals value security less than other industries? Are hospital security programs less efficient than the security programs of other industries?
There is some irony in the pay differential received by hospital security personnel. Despite the lower pay, hospital security personnel on a daily basis work with security challenges far more difficult than many industries. The difficulty of the security challenge arises from the desire of most hospitals to maintain a sense of openness, while at the same time adequately protecting patients, visitors and employees. Security managers who work in an environment of strict access control (many of whom are receiving salaries in the range of six figures) would go crazy with the amorphous access control of most hospitals.
What accounts for the substantial differential in the perceived value of a hospital security program and those security programs of many other industries?
One needs to look at hospital security programs as compared to other security programs in other industries. All security programs should have the broad goals of protection people and assets. The question becomes: What percentage of that effort should be aimed at protection people (employees, customers, visitors, etc.) and what percentage should target the protection of assets (structure, equipment, supplies, personal property, vehicles, etc.)?
Those industries that place a higher value on security programs than do hospitals do so because those programs are truly a valued added service for the reason that they bring dollars to the bottom-line through savings. Most industries that have significant security budgets expect a significant return on investment to be derived from protecting the assets of the enterprise. Most hospital security programs are all about protecting people at the exclusion of protecting property. We support the notion that the mission of all hospitals is the treatment and care of patients. However, this mission does not need to be achieved at the exclusion of a sound asset protection program. Yet some studies have estimated that hospitals lose as much as $3500 per bed per year.
Therefore, it is not difficult to understand why hospital CEOs perceive the security budget as a necessary burden primarily aimed at reducing liability and avoiding bad press. Hospital CEOs should begin to expect and demand that hospital security programs include as part of their mission the protection of assets. This expectation is surely in their self interest and in the interest of the healthcare organizations they serve. If hospital CEOs demand improved asset protection, healthcare security professionals will acquire the necessary skills to deliver on that demand.
Let me give you just on example to make my point. In the midst of a hospital security assessment, we received a tip that a cafeteria cashier was stealing money from the cash register she worked at. Its worth reiterating that this information came from a tip. The information was not derived from register over and under reports. It was not derived from cost ratio studies, such as operational cost-per-patient day reports. In concert with the hospital security director we came back to the hospital in the middle of the night and had a pin-hole CCTV camera installed directly over the register in question. After a week or so of surveillance it was determined that the cashier in question knocking down in excess of $150.00 per day. She was making around $800.00 tax free per week. Additionally, it was determined this hospital took in cash at 32 other locations throughout their facility. Despite this, the hospital had no cash handling policy. These leakage points exist in most every department in many hospitals and they go undetected.
We see these shortfalls as a significant opportunity. We believe the facts revealed here afford a real opening to reduce costs, bring more money to the bottom line, and increase the value of the security and loss prevention program of every hospital.
What are we suggesting here? Two actions are required. First Hospital CEOs and administrators should begin demanding that their hospital security programs take on the mission of aggressive asset protection. Second, healthcare security managers must begin to learn and acquire the necessary education and skills that will enable them to initiate effective asset protection programs at their various healthcare facilities.
In order to achieve these goals, hospital security professionals will need to learn the business side of hospital operations. They will need to gain insights as to the business operations of each department, such as materials management, pharmacies, housekeeping, linen and food services. They will need to work more closely with the CFO and department managers. They will need to initiate aggressive and competent investigations whenever there is a loss. Organizations that support healthcare security, such as ASIS International and IAHSS will need to develop seminar and workshop curriculum in order to enable security personnel to learn the asset protection techniques of other industries.
Security Source in Concert with SMSI Inc. a security Consulting firm will begin to offer education programs that will enable security managers to acquire the requisite skills needed to implement effective loss prevention programs. This will help ensure that their security operations are truly providing a value added service.
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