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Obviously, anyone who is a health care POA agent or guardian of a person residing in a facility is supposed to make decisions based on what is in the best interest of the resident. If the POA agent or guardian is maintaining close contact with the resident, that person should know better than anyone else what is in the resident's best interest, but this is not always the case, and it just gets more complex from there.
More complexity stems from it being hard to know for sure what's in the best interest of some residents with dementia. Many such residents, who used to greatly enjoy such outings before their dementia progressed, might now be troubled by a change of routine. A "joy ride" might turn out to be anything but that and a nice "dinner" might turn out to be a stressful evening spent cleaning up a mess in the restroom, or worse in the dining room. Worst of all, such an outing undertaken by inexperienced family members or friends could end with a trip to an emergency room due to not being familiar with worsened mobility issues. On the other hand, an outing with experienced and careful family member or friends might be greatly enjoyed or at least not harmful at all.
Another reason the question can be complex is because family members (the agent and/or the others) sometimes let their own personal anger, whims, dysfunctional histories, and/or states of denial cloud their otherwise sound judgments about what's actually best for the facility resident and instead may want to do what makes them feel good about themselves (e.g. I'm a good person because I took dad out to dinner, or I'm a good person because I prevented dad from having to go out with xxxx evil person).
CMPKSB, you asked what might seem to be a simple legal question, but since POA agents are legally supposed to act in the best interest of POA grantors, and given that it's often very hard to know what's in the best interest, and given that judgments about it can be clouded, it is a complex question. Best wishes.
Who's telling you that, by the way? If it's anyone on the staff, might be best to call a meeting and iron out the ground rules.
The medical POA for a person who is legally incompetent is thereby responsible for the welfare of that person. Making decisions on their behalf, in their best interests, is the POA's responsibility.
There is a balance to be struck, though. If going out for a drive or to dinner is enjoyable for the person and actually doesn't disrupt routine or leave him unsettled or expose him to risk, what is the justification for banning these outings? You have to impose reasonable, proportionate conditions and restrictions.