The Role of Risk Management in Healthcare

In the healthcare industry, patients, staff and even organizations themselves are exposed to risk on a daily basis. Risks to patient care, financing, accreditation, market share and reputation are unavoidable, making a strong risk management program an essential component to any well-run healthcare organization. Risk management in healthcare encompasses all of the steps taken to identify, assess, mitigate, monitor and prevent risks from causing significant damage. In order for proactive risk assessment and response to have a meaningful impact in the midst of a health crisis, risk management should constantly remain a top priority.

Risk Management in Healthcare Organizations

Traditionally, the role of risk management focused on patient care and safety, but in our modern world, new technologies, cybersecurity concerns, medical science advancements and an ever-confusing regulatory landscape have driven risk management to become a much more complex and intricate process. In an organism as large as the healthcare industry, risks come in many different shapes and sizes. Whether it be working directly with patients, clinical research or healthcare administration, an unidentified or unaddressed risk can have a rippling effect impacting more than a single department or system. Nowadays, the way an entity approaches risk will have a significant effect on the value it brings to clients and ultimately, it’s financial performance.

The role of risk management has evolved from a reactive measure meant to limit legal exposure to become a preventative, comprehensive program capable of safeguarding the entire healthcare ecosystem. Proactively implementing a risk management strategy helps to prevent an incident from occurring or minimize the effects of one that cannot be eliminated altogether, thus improving the quality of the organization.

While the role of risk management in healthcare is growing, the adoption of more sophisticated processes has been slow to come about. This lack of preparation can lead to dire consequences in a crisis: compromised patient and provider safety, increased risk of liability and financial losses.

How Risk Management Works in Practice

Throughout an organization, time should be taken to identify and assess risks. All potential risks need to be prioritized so that you can address those with highest potential to negatively impact your operations in any way. After that, you’ll be able to develop an organizational-specific risk management plan. Developing a plan, of course, is not a simple, quick process.

You first need to begin by performing a risk-specific analysis that answers these questions:

What could possibly happen? To answer this question takes a considerable amount of research to ensure you have the latest information on everything from regulations to scientific studies. Every healthcare provider should constantly review new guidelines, studies and directives announced by governing bodies such as the Food and Drug Administration (FDA), the Department of Health and Human Services (HHS) or the American Society for Healthcare Risk Management (ASHRM). In addition to gathering external information, internal policies, procedures and processes should also be reviewed.

How likely is a risk to occur? In order to determine this, you need to engage those in your organization who are familiar with daily operations and can assess the probability of a risk. A qualitative assessment can be used to determine the likelihood by using an established scaled (such as low, medium or high). This subjective rating system depends on assessor expertise to be the most accurate.

If a risk occurs, how severe will the effects be? In order to gain more insight about your risk mitigation process, a quantitative assessment attaches numerical values to your analysis such as money or time. By using values such as money, time or lost assets to determine risk impact, a quantitative risk assessment provides an accurate reflection of your threat landscape By understanding the severity of a risk, you are able to rank and prioritize threats to deal with the most immediate and dangerous.

How can the likelihood of a risk occurring be mitigated? In general, your risk mitigation strategy will fall into one of these categories: risk avoidance, risk limitation, risk transference or risk acceptance. How you proceed depends on your risk experts’ analysis of the risk in question.

How can we reduce a risk’s impact? After you have chosen a strategy, you will take steps to implement it. For example, doctors will transfer the risk of medical error causing significant financial loss by purchasing malpractice insurance.

What cannot be proactively avoided? Some risks are impossible to adequately prepare for in advance, and careful consideration should be taken to make sure you’ve prepared as well as possible. You can’t plan for every eventuality, but you can anticipate that at some point, a crisis will occur. The role of risk management in healthcare is to help you prevent a crisis from occurring and be as prepared as possible when the unexpected does happen.

The Role of Risk Management in Crisis

During health crises, such as the COVID-19 pandemic, risk management is an important component to focus on. Chaotic situations can be full of uncertainty; uncertainty is unknown and unpredictable. Risk however, is measurable, relying on objective data and analysis. Having a plan for identifying, assessing, mitigating and monitoring risks will keep your organization on track and focused on keeping all patients, care providers and the institution safe.

The Role of Risk Management Software

From building assessments to evaluating data, ComplianceBridge Risk helps you to manage each step and make your job easier. This versatile software brought to you by ComplianceBridge allows you to manage risk on as many as six different dimensions. You have the ability to customize question sets and even to weigh questions to improve measurement of risk with conditional logic. Respondents can delegate assessments or reassign specific questions to the most qualified individual. Assessments can also be divided up among teams, departments or individuals, adding more flexibility to the process. Results can be viewed in real-time from a manager dashboard.

ComplianceBridge Risk will allow your company to manage risk on a regular basis. It improves reporting and giving you more accurate data to aid in choosing an appropriate risk mitigation strategy. Learn more about our risk management software today by scheduling a demo!