Risk Management in Healthcare: Challenges and Opportunities (2022)

On any given day, professionals in hospitals and healthcare facilities across the country encounter a variety of risks that can impact an organization’s performance and potentially impair patient health. Practitioners need to take into account new regulations and legal requirements when providing patient care. Sensitive data, such as electronic health records (EHRs), can be compromised and manipulated by digital criminals, and inadequate cleansing or sterilization can open up patients to new infections and ailments.

These real and ever-present dangers illustrate the need for comprehensive risk management in healthcare. But effective risk management is more than just being aware of these threats; it entails developing, implementing, and practicing policies and protocols to address them. This requires a cooperative effort from healthcare leaders, practitioners, and other staff members to ensure all risks are acknowledged and accounted for. While it’s difficult to ensure that no mistake or wrongdoing ever occurs in a healthcare environment, adequate preparation will help staff address those that do.

Professionals considering a rewarding career in healthcare or health management, such as those who graduate from Maryville University’s online bachelor’s and master’s in health administration programs, must understand the necessity of healthcare risk management, as well as how to properly implement it to ensure the best outcomes possible for patients and organizations.

Risk Management in Healthcare: Challenges and Opportunities (1)

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What Is Risk Management in Healthcare?

According to an article in the Journal of Epidemiology and Preventive Medicine, “Risk management for healthcare entities can be defined as an organized effort to identify, assess, and reduce, where appropriate, risk to patients, visitors, staff, and organizational assets. Risk management in its best form may be to use it in a proactive manner in identifying and managing the risks.”By this definition, healthcare risk management can include the following efforts:

  • Hospital health practitioners’ regular use of hand sanitizer to ensure they do not spread infections to patients
  • Color-coded signs and walkways in a clinic so visitors can navigate their way through the building without entering dangerous or hazardous areas
  • Leaders’ installment of harassment-related training and policies so staff members abide by the codes of conduct and are safe from harm
  • A robust cybersecurity system to protect confidential health data from being compromised, manipulated, and falling into the wrong hands
  • Legal teams’ identification of potential risks of malpractice lawsuits

In each of the above healthcare risk management examples, there is a unique risk that has been identified and a policy that has been enacted to help prevent or address it. According to the Journal of Epidemiology and Preventive Medicine, identifying a risk can take many forms. It could include surveying members of hospital staff to unearth common conflicts or issues they encounter in their day-to-day operations, carefully monitoring patients to observe any particular challenges they face during their time in a hospital, analyzing past records to notice patterns or trends, and collecting feedback from patients and incident reports. Once a risk has been identified, healthcare staff members can develop a means of addressing and managing it. Certain risks will always be present, such as bacteria, infections, and viruses. In those cases, risk management can help prevent the risk from spreading but not stop it entirely. For a clinic that has installed color-coded signs and walkways to help guide visitors, it is still possible that some people will get lost and disrupt healthcare activities in the process. And even though a robust cybersecurity system can address current digital threats, it might not be able to stop new types of cyber attacks in the future. Healthcare risk management acknowledges that the dangers of the risk are still there, but with preparation and strong policies, the scope of those threats can be reduced.

What Is the Purpose of Risk Management in Healthcare Organizations?

All organizations conduct risk management in some way. Commercial banks install safes to protect their clients’ money from theft. Towns and cities have traffic lights and stop signs to curb the threat of speeding and dangerous driving. Risk management is especially vital in healthcare organizations because hazards can impact health.When thinking about healthcare risk management, the purpose that health organizations need to consider is preventing the worst-case scenario that can evolve from a certain risk, danger, or threat. For example, a hospital has a policy that requires all staff members to use hand sanitizer before they meet with a new patient. The hand sanitizer helps address the health risks of spreading bacteria, germs, and other contaminants that could potentially cause or worsen certain health problems.

The purpose of risk management in healthcare organizations is to identify potential hazards or threats and do everything possible to mitigate them. For example, the possibility exists that a health practitioner who has visited with many other patients may be carrying something that could be harmful to others.

How to Develop a Healthcare Risk Management Policy

Risk management is important in healthcare, and so is developing an effective policy that addresses various threats and concerns. The Journal of Epidemiology and Preventive Medicine outlines five basic steps of risk management in healthcare:

  1. Establish the context
  2. Identify risks
  3. Analyze risks
  4. Evaluate risks
  5. Treat/manage risks

Establishing the context involves determining the environment or situation in which the risk is apparent or may occur. For example, the context might refer to the guidelines for managing threats and hazards in a certain hospital or clinic department, such as a nursery or emergency room.

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Identifying risks entails using a variety of tools and resources to determine what hazards may exist in an environment. An urgent care clinic may identify risks by conducting interviews and requesting feedback from healthcare staff. A nursing home can determine risks to patients by evaluating their previous medical records. And a major hospital could turn to patient complaints and executive reports to understand new and current risks.

Analyzing and evaluating risks includes understanding the level of the healthcare risk, its importance and underlying causes, and current measures in place to address it, according to the Journal of Epidemiology and Preventive Medicine. For example, a clinic may receive a sudden influx of patients who have been stricken by the flu. The healthcare staff can analyze this risk to determine its risk level (i.e., the flu’s ability to spread to other patients), its underlying causes (e.g., seasonal changes or lack of proper hygiene), and what current measures are in place (e.g., treatment options for patients and staff protocol for interacting with patients).

Once a facility understands the underlying causes, scope, and potential severity, it can treat and manage the risk. Monitoring and reviewing the implementation and effectiveness of the new risk management policy is also crucial.

Healthcare Risk Management Strategies

There are several types of tools and strategies that can assist healthcare officials when developing, implementing, and assessing healthcare risk management. Examples include keeping as much accurate and complete documentation as possible, according to Investopedia. If a hospital is facing a malpractice suit regarding a doctor’s performance, having extensive documentation pertaining to the doctor’s previous treatment history, feedback from peers and staff members, and previous complaints or concerns can help the hospital manage and assess the risk.Another example of a healthcare risk management strategy is training new staff in the various areas of risk management so they can effectively respond to risks, according to Investopedia. Leaders and senior officials shouldn’t be the only ones who consider risk management. Instead, healthcare organizations should instruct all staff members on how to treat and assess risks.

It’s also important to develop strategies regarding the risks that may arise from increased reliance on technology and digital devices in a healthcare organization. A hospital that uses digital technology to organize medical files may have addressed several risks by having information available in a convenient and accessible format. At the same time, in that health risk management example, hackers could attack and steal the information that has been stored digitally. The healthcare organization could prepare for this new risk by developing and implementing cybersecurity procedures, such as only giving certain employees access to specific digital files or requiring multiple layers of authentication and security to access a digital hospital network.

Health Risk Management Certifications

Health risk management certifications can help professionals understand the necessities and methods of healthcare risk management while establishing themselves as experts on this subject.

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According to the American Society for Health Care and Risk Management (ASHRM), the Certified Professional in Health Care Risk Management (CPHRM) is the “health care industry’s premier certification for the risk management profession.” Individuals who wish to earn this certification must pass an exam that covers clinical and patient safety, risk financing, legal and regulatory procedures, health care operations, and claims and litigation. The ASHRM also offers events and educational programs where participants can learn more about healthcare risk management and certifications.Another option is the Enterprise Risk Management (ERM) certification. As the ASHRM explains, “Enterprise risk management practices allow health care organizations to better anticipate, recognize, and address the various risks associated with transformational changes.” Unlike the CPHRM, this certification involves initial online learning, in-person meetings with faculty regarding health risk concepts, and an additional online and in-person learning component. Throughout this process, candidates are evaluated on their knowledge and application of concepts such as decision analytics, diagnostic and assessment tools, and risk identification and assessment.

Healthcare Risk Management Jobs

Healthcare risk managers are dedicated to evaluating, analyzing, reducing, and addressing risks in a healthcare facility. According to the Houston Chronicle, “These mid-level managers work closely with other administrators and must have a thorough knowledge of hospital policies and procedures.” They may work for a single healthcare organization or act as a consultant on behalf of another company or group. Their day-to-day responsibilities can include interfacing with patients, logging complaints from individuals, and developing risk management strategies alongside senior staff members.

However, the healthcare risk manager job isn’t the only position involved in risk management policies and procedures at an organization. For example, health services managers and healthcare administrators are likely to be trained in risk management. Doctors, nurses, and technicians also must incorporate a level of risk assessment and analysis in their day-to-day duties while following risk management guidelines. Individuals who work on the financial side of healthcare, such as a medical claims adjuster, incorporate risk management into their positions. For example, they might determine whether a patient or healthcare organization is committing insurance fraud.

Ultimately, many employees in a healthcare organization are responsible for healthcare risk management, though certain roles emphasize the development and implementation of risk management policies more than others.

Risk Management and the Future

In any type of organization, there are going to be risks. Some may be more pressing and severe, while others may not require any sort of external policy or approach to handle them. Nevertheless, it’s important to effectively identify, address, and mitigate risks, which requires a robust risk management policy.Strong risk management is vital to the healthcare field. A single malpractice suit could cost a hospital millions of dollars. A small clerical error or treatment oversight could lead to a decline in the health of a patient and even death. And the lack of procedures in place to effectively address and mitigate these risks can lead to larger problems in the future. It may not be possible to stop every healthcare risk from developing into a larger problem, but healthcare risk management enables professionals to anticipate and address conflicts, now and in the future.

This requires the efforts of dedicated and trained healthcare staff, such as hospital administrators and healthcare risk managers. But the first step in becoming a capable healthcare risk professional is completing a degree program. Maryville University’s online Master of Health Administration and online Bachelor of Science in Healthcare Management prepare future healthcare leaders to evaluate various risks to patients, practitioners, and facilities and to develop innovative solutions to address future challenges in healthcare.

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Sources:

American Society for Health Care Risk Management, Certified Professional in Health Care Risk Management (CPHRM)

American Society for Health Care Risk Management, Health Care Risk Management Certificate Program

Investopedia, “The Importance of Healthcare Risk Management”

Journal of Epidemiology and Preventive Medicine, Steps in the Process of Risk Management in Healthcare

Maryville University, Master’s in Health Administration Online

(Video) Webinar - Healthcare Data Management Challenges & Opportunities

Maryville University, Online Bachelor’s in Healthcare Management

U.S. Bureau of Labor Statistics, What Medical and Health Services Managers Do

Videos

1. Data-Driven Healthcare: Challenges and Opportunities
(Wolfram)
2. Advance Care Planning: Challenges and Opportunities - Webinar 1
(NASEM Health and Medicine Division)
3. The eMERGE Genomic Risk Assessment and Management Network – Challenges and Opportunities (Cong Liu)
(Dept. Biomedical Informatics Columbia University)
4. Senior Cyber Leaders Discuss Risk Management Challenges and Opportunities
(AFCEA International)
5. Creativity in healthcare: challenges and opportunities | Matthew Roberts | TEDxCardiffUniversity
(TEDx Talks)
6. Meet the Champion of Health Care Risk Management
(Providence Health Vancouver)

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