The Purpose of Risk Management in Healthcare

Risks to patients, staff, and organisations are prevalent in healthcare. Thus, it is necessary for an organisation to have qualified healthcare risk managers to assess, develop, implement, and monitor risk management plans with the goal of minimising exposure. There are many priorities to a healthcare organisation, such as finance, safety and most importantly, patient care.

The Role of Healthcare Risk Managers

Risk managers are trained to handle various issues in multiple settings. The duties a risk manager undertakes are ultimately determined by the specific organisation. These professionals typically work in the following areas of medical administration:

Financing, insurance, and claims management

Event and incident management

Clinical research

Psychological and human healthcare

Emergency preparedness

Healthcare managers identify and evaluate risks to reduce injury to patients, staff members, and visitors within an organisation. Risk managers work proactively and reactively to either prevent incidents or minimise the damages following an event.

The Importance of Risk Assessment & Management Planning

For example, the Centre for Disease Control (CDC) recently published research that found that prolonged urinary catheter use is the leading risk factor for catheter-associated urinary tract infections. Based on this information, a risk management plan was implemented requiring physicians to regularly evaluate the catheter. The result was a decrease in patient risk. Given that each organisation faces unique challenges, there is not a one-model-fits-all risk management solution. Challenges faced by administrators that should be addressed in a risk assessment plan include but are not limited to:

Patient safety

Mandatory federal regulations

Potential medical error

Existing and future policy

Legislation impacting the field of healthcare

The hazards of not preparing for potential issues can have significant, long-term effects. Neglecting to have comprehensive risk management plans in place can compromise patient care, increase liability risks, and result in financial losses. Thus, potential risks must be evaluated and measured in terms of their potential negative effects. Based on the risk assessment, an organisation-specific management plan should be developed, implemented, and monitored.

Effective Patient Care Practices

The development and implementation of healthcare risk management programs are based on extensive ongoing research. Risk managers must stay up-to-date on relevant information in their organisation because research results could prove contradictory to presumptions that would otherwise shape risk management practices. For example, one study published by JAMA Internal Medicine revealed that increasing the hours of sleep for residents in teaching hospitals received actually compromised patient safety. The risk-management outcome was to ensure that strategies were in place to improve resident’s sleep schedules and reduce potential risks to patients.

Developing Risk Management Plans

Reviewing other studies is one way to develop risk management programs. Following the directives of governing organisations such as the Department of Health and Human Services, Food and Drug Administration (FDA), and American Society for Healthcare Risk Management (ASHRM) ensures risk management compliance. Based on the information provided from other resources, managers should conduct organisation-specific risk analyses to determine potential risks.

The analysis should identify:

What could possibly happen?

How likely is something to happen (measuring risk)?

How severe will the outcome be if something did happen?

How can the likelihood something will happen be mitigated on the forefront and to what degree?

What can be done to reduce the impact (and to what degree)?

What is the potential for exposure or what cannot be proactively avoided?

Using analysis results, risk managers can compare the likelihood of different adverse events along with their impacts and rank potential risks in terms of severity. Plans for mitigating risks and handling them appropriately can then be developed. Risk management plans also undergo quality assessments, so the interventions and actions proposed are addressed as real potential issues. Once a strategy is in place, it is monitored and modified as needed.

Implementing Strategies for Patient Care

As noted, risk management plans are specific to different healthcare facilities. While avoiding potential financial consequences is one concern, patient needs are generally the priority. In clinical studies, for example, Institutional Review Boards (IRBs) monitor proposed research plans before they are implemented to ensure minimal risk to human subjects. Plans for risk management must cover patient-specific risks and be well documented; they must also be accessible to those working with patients.

Many patient risks can be reduced by adequately training physicians and staff, encouraging strong communication among staff members, providing counselling services for those working with patients, and conducting competency assessments. Other risks posed to patient safety can be mitigated using patient-specific risk management strategies such as:

Not filling expired prescriptions - Sending patients adequate notification of prescription expiration will support communication between patients and physicians thus reducing potential prescription medication abuse.

Following up on missing test results - Patients who need to take additional medical tests following appointments may fail to do so, or the test results might get lost. Developing a plan to monitor receipt of test results guarantees the results are reviewed, so patients can then be consulted.

Tracking missed appointments - Implementing a system to follow up with patients who miss appointments but fail to reschedule is another proactive step in managing patient risks.

Communicating with patients - Patients may have a limited understanding of information received from physicians. Having a strategy that checks the patient’s comprehension of information reduces the likelihood that the patient will misinterpret a physician’s orders or will improperly take medication.

Prevent falls and immobility - Making minor modifications to things like bed rails, bathtubs and toilets lacking grab bars, institutional lighting, and the conditions of the ground can significantly reduce the risks of such hazards.

Sufficient record retention - Keeping patient records on file for an extended period of time or indefinitely is useful for monitoring patient health, even when patients are not actively seeking care. Risk management protocol should also have plans in place for disposing of records in accordance with federal mandates.

Comprehensive risk management plans in patient care cannot only facilitate patient safety initiatives but also reduce readmissions. Robust risk management requires extensive preparation and qualified healthcare administrators to develop, implement, and monitor an organisation’s plan. This is ultimately beneficial to overall patient satisfaction and other bottomline priorities within healthcare organisations. Companies should tailor their risk-management processes to these different categories. While a compliance-based approach is effective for managing preventable risks, it is wholly inadequate for strategy risks or external risks, which require a fundamentally different approach based on open and explicit risk discussions. That, however, is easier said than done; extensive behavioural and organisational research has shown that individuals have strong cognitive biases that discourage them from thinking about and discussing risk until it is too late.

Question 2

Students need to present the theory and justify in detail the reasons why the proposed responses are applicable.

Responses must not be more than 2 pages.

2.1 Propose and summarise the type of response and controls that the risk managers should adopt for each of the risks identified in the previous question? (15 marks)

Tabulate your response.

2.2 Using the appropriate diagram, plot the respective risks (at an inherent level and after controls are applied) to show, discuss which type of control is appropriate and how it can be used to show ranges instead of a static state? (10 marks)

Students need to discuss the diagram(s) used to plot the risks as well as why the type of control is appropriate.