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October 18, 2010
Our current economic climate is continuing to force healthcare organizations to evaluate operational efficiencies. Maximizing profits, or at least not operating at a loss, has long been at the forefront of business objectives. Very few organizations can survive in the long run without meeting their expenditures. But how much risk can or should be taken to achieve this objective? While tolerance for risk varies with the culture of the organization, has it come to a point where our assumption of risk is at the expense of our customers? Can more healthcare medical errors be averted by proactive risk management?
Where does the role of risk management fit into your operations? Risk management is typically a hybrid function bridging a number of disciplines to reduce the incidence of organizational loss. Activities can be proactive, attempting to prevent or mitigate a loss or reactive – in other words, damage control. I’m confident that most healthcare organizations would agree that they have a risk management program, but is it proactive or reactive? Proactive risk management may avoid some losses and expenses that could otherwise impact your bottom line.
One problem risk management struggles with is demonstrating its “value” – how can you quantify what doesn’t happen because it was prevented? The healthcare industry is focused on benchmarking and measurement. So, how can a business case for risk management be made? The challenge lies in finding a metric that measures its value effectively and efficiently. If it can also demonstrate a cost savings, it speaks to those individuals charged with managing the organization’s financials. Here are a few examples for making a business case:
And while data is important, risk managers must also enhance their visibility as well. Here are some ideas:
Healthcare Risk Management Week is recognized every year during the third week in June by the American Society for Healthcare Risk Management (ASHRM). However, it’s never too late for a CEO to recognize the individual who leads the risk management function in their organization; nor is it too late for risk managers to take steps to demonstrate that risk management is a valued discipline that affects every aspect of a healthcare organization’s operations. The commonly used term “enterprise” risk management has never been more appropriate.
By Sharon Hall, Vice President
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.