Health Care Risk Management
Helpm31990
Chapter1.pptxChapter 1: Risk Management Dynamics
Healthcare can hurt…
In the 1970’s, the fact that receiving healthcare services can actually cause harm was brought to the forefront with the Institute of Medicine report “To Err is Human: Building a Safer Health Care System”:
In 2 studies, adverse events occurred in 2.9% and 3.7% of hospitalizations
More than half of these adverse events were the result of preventable medical errors
Extrapolation: > 1 million medical errors may occur each year resulting in 140,000 deaths
More data about medical errors
Studies indicate the following:
Hospital employees recognize and report only 1 in 7 medical errors that harm Medicare patients
Even after medical errors are reported and investigated, many hospitals do not change their practices to prevent repetition of the event
>50% of patients treated for side effects and other medication related injuries were 65+ years old
Continued reporting of wrong-site surgeries
What can be done?
The Joint Commission recommended safety standards in 2001 that relate to:
Providing leadership
Improving organizational performance
Information management
Patient’s rights
It is imperative to monitor adverse events from 2 standpoints:
Quality of care
Legal responsibility to do no harm
How do we monitor adverse events and ensure patient safety?
Recognize and minimize instances where a medical error can occur
This is the function of Risk Management
What is Risk?
Uncertainty about future events that may threaten the safety of patients and the assets and reputations of providers.
What do we mean by assets?
People – patients, clinicians, volunteers, and employees
Property – buildings, facilities, equipment, and materials
Financial – revenue, reserves, grants, and reimbursement
Goodwill – health and well-being, reputation, and stature in the community
What is Risk Management?
Discipline for dealing with the possibility that some future event will cause harm.
An organized effort to identify, assess and reduce risks to patients, visitors and staff
Objective of Risk Management
To reduce the risk of preventable accidents and injuries and minimize the financial loss if one occurs
It provides strategies, techniques and an approach to recognizing and confronting any threat faced by an organization.
In other words…
What can go wrong?
What will we do to prevent harm and in the aftermath of an incident?
If something happens, how will we pay for it?
What are the risks we are trying to protect against?
Antitrust violations
Breach of contract
Casualty exposure
Defamation
Embezzlement
Environmental damage
Fraud and abuse
General liability
Hazardous substance exposure
Professional malpractice
Securities violations
Transportation liability
Worker’s compensation
So, what will be done?
In the Risk Management Process we will:
Identify Risk
Perform Risk Analysis
Implement Risk Control/Treatment
Finance Risk
Risk Identification
Continuous collection of information to search for the various liability risks such as
Property risks
Casualty/liability risks
Employee benefit risks
Risk Analysis
Evaluating past experience and current exposure to limit the impact of risk, keeping in mind that there are different levels of Risk
Severity to the individual and/or organization
Number of people harmed or potentially harmed
Likelihood or frequency of occurrence
Risk Control/Treatment
Most common function of risk management programs
Risk Management programs should categorize potential liability into 4 categories:
Bodily injury
Liability loss
Property loss
Consequential loss
Risk Control/Treatment
Risk Acceptance
Exposure Avoidance
Loss Prevention
Loss Reduction
Exposure Segregation
Contractual Transfer
There are many methods and techniques an organization can use to minimize risk:
Risk Financing
An organization should have financing available to fund losses and implement risk management activities
Self-insurance
Commercial insurance
Budgetary funds set for activities and/or losses
American Society of Healthcare Risk Management (ASHRM)
Components in a risk management program:
Designate risk manager
Access to all data
Organizational commitment
System for identification, review and analysis of adverse outcomes
Ability to integrate and share data
Evaluate risk management program activities
Provide educational programs
Provide information on staff competency
Three Major Functions of Risk Management – Business Orientation
Reducing the organizations’ risk of malpractice suite by maintaining or improving the quality of care
Reducing the probability of a claim being filed
Preserving the organization’s assets once a claim has been filed
‘Red Flag’ Areas to Watch
Treatment Conditions
Patient Relations
Practice Management
Conduct of Staff
Risk Management Tools for Identifying Risk
Incident Reporting
Occurrence Reporting
Occurrence Screening
Incident Reporting
System to identify events that are not consistent with the routine operation of a hospital or routine care of patients
Occurrence Reporting
A policy listing specific adverse events that MUST be reports
Required by some states and insurers
Can increase identification of adverse events to 40-60%
Occurrence Screening
System that identifies deviations from normal procedures or expected outcomes
Uses criteria to identify adverse events but does not rely on staff reporting
Increases identification of adverse events to 80-85%
Risk and Quality of Care
There is sometimes overlap between these functions in the healthcare setting.
Integrating risk management and quality assurance functions can result in:
Maximization of the use of limited resources
Elimination of duplication
Developing new solutions to problems
Facilitation of training programs
Improvement of budget process
Specific Risk Management Functions
Incident Identification, Reporting and Tracking
State Mandated Incident Reporting
Incident Review and Evaluation
Take action to prevent recurrence of incidents
Internal Documentation
Credentialing and Privileging
Patient Complaint Programs
Risk Management Education
Summary
Risk Management is about reducing preventable adverse events and minimize financial loss should such events occur.
There are many tools available to assist the Risk Manager.
