About Ethical Leadership Group · Ethics and Compliance Hotline Benchmarking: Best Practices and...

Ethics and Compliance Hotline Benchmarking:

Best Practices and Data Trends

2009 HCCA Compliance InstituteApril 26-29, 2009

Mary Bennett, R.Ph.

Vice President, Ethical Leadership Group,

A Global Compliance Company

© 2009 Global Compliance and Ethical Leadership Group. All Rights Reserved.2

● Founded in 1993

● Consulting in ethics, compliance, values, and corporate responsibility is all we do

● A Global Compliance Company

● Categories of services● Assessment and monitoring● Communications● Training● Strategy

● Have worked with over 25% of Fortune 200. Have worked in 40 countries on every continent

● Obsessed with quality, thoroughness, objectivity, and

service

About Ethical Leadership Group


About Global Compliance

●27 years experience in ethics and compliance

●Introduced the original compliance reporting hotline in 1981

●Currently providing hotline services to over 1,800 clients

including:

Serving more than 20 million employees with hotline/helpline

services in more than 200 countries and territories and in more

than 80 languages on behalf of our clients

●Most comprehensive and integrated ethics and compliance

offerings in the industry: assessment and evaluations, training,

communications, hotlines/helplines, information management,

analytics, exit interviews, mystery shopping

● 1/2 of America’s Fortune 100 ● 1/3 of America’s Fortune 1000

● 1/3 of America’s Fortune 500 ● 1/4 of the Global 500


Ongoing challenges for ethics and compliance officers – the conundrum

● So much data, but not always clear what it means

● Need to demonstrate program effectiveness

● Need to report meaningful and actionable data to

senior leadership and the Board

● Need to know how the company compares to other

organizations inside and outside of the industry

● Finding context…


Informed decision-making comes

from a long tradition of guessing

and then blaming others for

inadequate results.

- Scott Adams


Q. What type of call data is your leadership most interested in receiving?

● Total numbers of reports received

● Total number of substantiated allegations

● Severity of allegations

● Number of anonymous reports

● Location of issues raised

● Call resolution time

● Disciplinary actions taken

● Industry comparisons

● Implicated groups

● Other


The only sure things…

● Too many calls is not good news.

● Very few calls is not good either.


Factors influencing call volumes and types

● Company and industry risk areas

● Workforce breakdown and staffing issues

● How reporting system is advertised

● Alternate reporting channels available to

employees and access to them

● Geographic location of employees

● “Special calling” of organization

● Organizational culture


Context is best conveyed through:

● Comparisons and trend analysis using internal and external benchmarking

● Look for:

● Significant changes in internal data

●Deviations from internal and external norms


Internal benchmarking● Should look at:

● Types of reports - call categories

● Allegations versus inquiries

● Anonymous versus named reporters

● Allegation priority

● Substantiation percentage

● Discipline/remediation actions

● Case cycle time

● Online vs. telephone reports

● Source of awareness

● Follow-up contacts from anonymous calls

● Sources and allegations - groups, locations, businesses or services


Internal benchmarking

● Should also drill into:

● Geographic locations

● Anonymous calls

● High volume of HR related calls

● Business segments and clinical services

● Levels of employees calling (and not calling)

● Case closure time by investigating department or investigator

● Case substantiation rate by investigating department or

investigator

● Disciplinary actions taken by business, by service and by level

of employee

● Any anomalies


Measurements and benchmarks currently available:

● ELG/ECOA surveys – last one had 64 participants

● Data from outsourced helpline provider

● Other published data

● Informal benchmarking with peers

● Internally created spreadsheets and databases

Note: Data published typically has not included ranges and is

sometimes based on averages rather than medians


Why use medians and rangesand not averages?

● Median - midpoint of the data

● Eliminates skew due to company/bus. unit size or

outlier data

● Reflects general trend of all companies/organizations in the database

● Ranges – capture the spectrum of experiences

● Takes into account the variety of cultures

● Flags the most extreme examples as potential

areas of concern


Demonstrating context to leadership

Acme’s 2008 anonymous report percentage

The range of

anonymous report percentages of the central 80% of Acme’s industry

The median anonymous report

percentage of Acme’s industry

The median anonymous report

percentage of all industries

The range of anonymous report

percentages of the central 80% of all industries

Data on this slide is fabricated for demonstration purposes


Demonstrating context to leadership – trends over time

Data on this slide is fabricated for demonstration purposes


What may cause changes in reporting trends?

● Training and communication initiatives

● Published (or rumors of) internal cases and disciplinary actions

● Internal restructuring /management changes/layoffs

● Policy changes – Code, clinical or HR

● Mergers/acquisitions/changes in lines of business or clinical services

● Regulatory changes or changes in OIG Work Plan

● News articles re: industry, competitors, or the latest

compliance scandal

● A real problem


Number of days to respond to a question (from 2006 ELG/ECOA survey)

Days 2006

1 day 38%

2 days 16%

3 days 10%

4-13 days 16%

14+ days 16%

Median = 2 days

Average = 5 days


Number of days to close a case involving

an allegation (from 2006 ELG/ECOA survey)

Days 2006

1-3 days 2%

4-10 days 13%

11-21 days 33%

22-30 days 35%

30+ days 17%

Median = 30 days

Average = 29 days


Reporting to leadership: the most frequently asked question…

How are we doing compared to others in the industry?

Requires: External Benchmarking


External benchmarking –our research

● Data analysis of Global Compliance database – over 300,000 calls in 2008


2008 Data – tracking the following healthcare industries:

• Hospitals

• Nursing Care

• Pharmaceutical Manufacturing


We currently calculate:

By industry, by client, by country (assuming sufficient data) with cross tabulations using these categories:

● Types of reports

● Case closure time

● Anonymous vs. named reporters

● Allegation priority

● Substantiation percentage

● Anonymous substantiation percentage

● Online reports

● Source of awareness

● Follow-up contacts

● Allegations vs. inquiries


Categories of calls used:

● Accounting, Auditing, and Financial Reporting

● Financial Misconduct, Billing Issues, Internal Audit Controls

● Business Integrity

● Falsification of documents, Fraud, COI, etc.

● Diversity, HR, and Workplace Respect

● Discrimination, Harassment, Compensation, Conduct

● Environment, Health, and Safety

● Assault, General Safety, Patient Safety

● Misuse, Misappropriation of Corporate Assets and Information

● Computer Usage, Employee Theft, Time Clock Abuse


Some interesting findings:


Rate of reporting

(2007 data from 460 companies with US

locations only)

Where do you stack up?


Percent of Employees Reporting (U.S., 2007)

0.4%

1.0%

1.3%

2.8%

0.0%

1.0%

2.0%

3.0%

Information & Publishing All Industries Median Healthcare Non-profits &

Associations

% of Employees Reporting


2008 Data – Report breakdown

Type

Percentage of all

2008 reports

Inquiries 26%

Reports 50%

Follow-ups 24%


2008 Data – How often do the same employees call with new issues?

● First time callers = 85%

● Repeat callers (as identified by the caller and includes prior years) = 15%


2008 Data – Repeat reporters varied significantly by industry

7%

15%

26%

0%

10%

20%

30%

Mining All Industries Average Industrial Manufacturing

% of Repeat Reporters


2008 Data – Substantiation rates by caller frequency

Substantiation Rates

Substantiated Unsubstantiated

First Time Caller 30% 70%

Repeat Caller 39% 61%

Which caller do you expect to be more credible – the first time caller or the repeat caller?


Some data points had very wide ranges across all industries

● Human Resource issues

● Anonymous reports

● Follow-ups on anonymous reports

● Online reporting versus phone calls

● Case closure time


2008 Data – Range of Human Resources/Diversity calls

● Diversity/Human Resources/Workplace

Respect

●Range = 55% to 80%

●Median = 73%


Anonymous reporting

● Source of frustration for Ethics Officers and

senior leadership because of missing data and

inability to talk directly with the reporter

● Senior leaders often push back on accepting

anonymous calls because:

● Fear of malicious calls

● Fear of inability to resolve case

● Strong belief that reporters with real issues

should be willing to give their name


2008 Data – High range of anonymous calls across industries

40%

60%

80%

30%

40%

50%

60%

70%

80%

90%

Construction All Industries Median Mining

% of Anonymous Reporters


2008 Data - Anonymous reporting within the Healthcare industry

60%

63%

67%

76%

50%

60%

70%

80%

Nursing Facilities Pharmaceuticals Hospitals Elder Care Facilities

% of Anonymous Reports


2007 Data – Substantiation rates of anonymous versus named reporters

Is there a difference in substantiation rate if the reporter gives his or her name?

Call Type Median Range

Percent of cases

substantiated with a named reporter

30% 13% - 67%

Percent of cases substantiated with an anonymous reporter

26% 14% - 46%


Relationship between critical priority reports and anonymous reports

► Two major findings:

► Linear relationship within industries between

critical priority allegations and percent of

anonymous reporters

► Industries with more anonymous reporters

generally have a higher percentage of critical

priority allegations


.

How do cases come in?(from 2006 ELG/ ECOA Survey)

Cases come in by:

2001 2004 2006

Phone 79% 73% 66%

Email/Internet 7% 14% 19% (Email)

9% (Internet)

Total = 28%

In person 6% 8% 10%


2008 Data – Online reporting

7%

17%

22%

43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Administrative

Support Services

Health Care and

Social Assistance

All-industry Median Professional,

Technical Services

% of Reports Submitted Online


How reporters heard about the hotline/helpline:

Source of Reporter’s Awareness

Poster 31%

Other Person 18%

Other 16%

Handbook 14%

Web 6%

Training 5%

Magnets, pens, etc. 4%

Customer Service 2%

OEC, HR 2%

Manager 1%

Email 1%

Newsletter/Memo 1%

Pay Stub <1%


Five most common mistakes we find in ethics helplines:

1. Discouraging callers with questions or requests for advice

2. Investigations missteps:

● Investigations that take too long

● Poorly trained investigators

● Maintaining objectivity and professionalism

● Not vigorously protecting confidentiality

3. Not publishing sanitized outcomes to employees

4. Not looking for trends and related variables

5. Call data to Board and senior management without context


Some advice and best practices:

● Use a robust case management system

● Run your data different ways

● Research anomalies

● Drill down to locations and businesses; issue types and topics; anonymous calls; substantiated allegations;

● Sometimes you “don’t know it until you see it”

● Follow your gut instincts on brewing problems

● Track and report on quality of case management and investigations

● Track discipline taken by offense, level of employee, or

group (physicians, nurses, clinical investigators, etc)…


Questions?


Contact information

Mary Bennett, R.Ph.

Ethical Leadership Group

[email protected]

847-949-5654

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