The concept and execution of risk management in the healthcare industry looks quite different than in any other industry. In most other industries, risk management strategies focus on preventing and alleviating any potential financial losses that a business may possibly be exposed to. In the healthcare industry, financial safety is just one facet of the risk management strategy.
The risk management strategy for healthcare providers can include any activity, process or policy that is designed to reduce liability exposure. Although financial risk is tied to nearly every risk management concern, the most damaging risk for healthcare providers is any threat to the well-being of their patients. Below are the most important aspects of risk management in healthcare.
Patient Safety
Patient safety should be the number one concern for healthcare providers for more than just the obvious reasons. Healthcare organizations who lack in the area of patient safety risk management are likely to see fewer patients overall, leading to the obvious risk of declining profits. More information than ever before is available to consumers regarding patient experiences, surgical complications, hospital-acquired infections and death rates, leading patients to decide for themselves where they will or will not receive treatment.
Beyond the general reputation and patient retention concerns, Affordable Care Act (ACA) regulations have made patient safety an even higher priority. More specifically, the Hospital-Acquired Condition (HAC) Reduction Program under the ACA that was designed to reduce the occurrence of preventable conditions that occur after a patient enters a healthcare facility, by penalizing facilities for certain adverse events. Beginning in 2015, Medicare began instituting a maximum one percent penalty, taken from the reimbursement amount, for adverse events that did not present on a patient’s admission to the facility but did occur during a hospital stay.
Communication and Data
As more and more healthcare providers move to digital solutions for patient information storage, patient education and communication and physician-to-physician communication, risk management in this area becomes a high priority. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) puts strict guidelines on healthcare providers regarding their patient data privacy and security provisions for safeguarding medical information.
Healthcare is also the most targeted industry for data breaches, accounting for over 40% of the breaches that occurred in 2017. A data breach can be a costly risk for any business, but any unauthorized disclosure of patient data is a HIPAA violation, subject to additional penalties, fines and lawsuits.
Risk management isn’t just a one time thing. It’s an ongoing process that has to adapt and change alongside an organization’s exposures. Partnering with a risk services provider that is familiar with the many facets of risk management in the healthcare clinic environment can help bring added value to the healthcare facilities insurance programs that your agency provides its healthcare clients.
About Connected Risk Solutions
At Connected Risk Solutions, we use our expertise and experience to provide insurance information and programs to those who serve long-term care and senior living facilities. Since 2007, we’ve been offering insurance and risk management plans designed to help our agents give their clients the ability to achieve continued growth while simultaneously protecting against loss, containing costs and increasing profitability. To learn more, contact us at (877) 890-9301.
