What is Risk Management for the Healthcare Industry

What is Risk Management for the Healthcare Industry

Risk management is an essential tool the healthcare industry can utilize to help weed out adverse outcomes that may plague their interests. It is impossible to prevent risk. However, it is possible to manage it through innovation, diversification, development, and strategic planning. Risk management is essential in the healthcare industry because lives are at stake.

The Importance of Risk Management in Healthcare

The healthcare industry faces higher stake risks than other industries. Therefore, risk management takes on a critical level of importance. The ultimate goal is to ensure patients’ safety and effective care, and risks to that goal take many forms to address. 

Sentinel Events

The Joint Commission defined a sentinel event as a “patient safety event that results in death, permanent harm, or severe, temporary harm.” Preventing these events requires establishing a system of checks and balances and a culture that empowers employees to speak out when they see a problem. Key areas to address in healthcare risk management include the following:

  • Patient handoff, whether at shift change or in provider turnover, is fraught with opportunities for miscommunication and loss of critical information.
  • Wrong-site or wrong-patient procedures are examples of human error that can result in tragic results. 
  • Medication mistakes, including incorrect administration, errors in dosages, and inattention to allergies or drug interactions, are common and potentially devastating.

How Does Risk Management Work in the Healthcare Industry? 

Healthcare organizations have a responsibility to ensure patient safety. Thus, here are the effective components of a successful risk management program for the healthcare industry.

Identify Risk

New risks are constantly emerging, especially in a volatile industry like healthcare. Therefore, a comprehensive identification of all threats is an ongoing process. Healthcare management should use data and engage all stakeholders in a cyclical effort to pinpoint obvious and hidden risks.

Prioritize Risk

Once your clients identify these threats, healthcare management should assign scores and prioritize them based on potential impact and likelihood of occurrence. Heat maps and risk matrices are helpful tools for visualization and resource allocation.

Explore Sentinel Events

A quick response to sentinel events, including a thorough investigation and mandatory reporting, is critical to ensure patient safety and maintain trust in a healthcare organization. An existing plan and atmosphere of cooperation, honesty, and respect will help to ensure a measured and effective response from staff.

Document Compliance 

Healthcare companies are subject to numerous oversight bodies that require reporting critical errors and incidents. A system for investigating, documenting, and reporting issues is vital to ensure compliance.

Learn From Mistakes

Mistakes can have tragic results, but it is essential to learn from them. A system of identifying “near misses” and “good catches” can help to identify threats and prevent them. A culture that encourages and rewards reporting of mistakes and implements a growth mindset will help to learn from errors and understand how to prevent them from occurring in the future.

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. With three offices to serve you in Chicago, Illinois; Phoenix, Arizona; and Burlington, Connecticut, we do everything we can to make your experience with us as professional and transparent as possible. To learn more, contact us at (877) 890-9301.

About Connected Risk Solutions

At Connected Risk Solutions, we provide our agent partners with bold solutions for comprehensive insurance and risk management that are unmatched in the industry. We have market connections and collective decades of industry experience, including deep specialization in healthcare liability and managed care E&O, cyber and tech liability, management and professional liability, as well as captive management and risk management. We strive to develop creative solutions no other wholesaler can match and to help our agent partners give their clients the ability to achieve continued growth while simultaneously protecting against loss.

Our specialists, located in offices throughout the country, are responsive and engaged. To learn more, connect with us.

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