Risk Management in health Care Organizations
Introduction
Risk management refers to the process by which risk managers identify, assess, and prioritize different kinds of risks. After identifying the risk, the risk manager creates a plan to eliminate or minimize the impact these negative events. There are different types of strategies for risk management, depending on the kind of risk.
The health care industry today faces numerous risk issues that relate to reforms in the health care industry, the shift from compensation based on the service provided to compensation based on the outcome, industry consolidation, changes in the relationship between the payer and service provider, use of electronic methods of record keeping and human capital management. The healthcare industry must at the same time also manage conventional risks such as malpractice claims, property exposures, costs of workers’ compensation, and many other liabilities in an environment that is highly competitive with reduced reimbursement. This results in health care providers being constantly in need of new ways of managing risks.
Role of Risk Management Health Care Organizations
Most health care institutions are adept at responding to pressing concerns, acute problems, and the urgent needs of patients. These include testing, diagnostics and elimination of symptoms and prescription of drugs. These are the main activities conducted in most healthcare organizations. This is without the health care workers regarding the fact that preventive healthcare is remarkably different from treatment especially when dealing with acute diseases and that it is possible for them to make mistakes. It is, therefore, necessary for healthcare facilities to put risk management to use. Risk management enables risk managers to make use of their available resources in covering insurance, finance and investment, healthcare service provision and legal issues. Risk management involves the following steps:
- Identification and analysis of the potential loss.
- Examination of alternative processes to mitigate the risks.
- Selection of the best possible solution among the available alternatives.
- Implementation of the techniques selected and
- Assessment and evaluation of the risk management process.
Risk management has expanded (from its initial role in patient safety) to include the protection of staff and visitors. It also includes addressing all sources of losses and risks.
Risk Management in Healthcare Spectrum
The responsibilities of a risk manager working in a healthcare setting are defined by the nature of the organization where he or she is employed. The size of the organization determines its requirements, and this influences the purpose and structure and of the risk management program. A risk management expert can be stationed in a hospital where acute medical care is provided, an academic health centre or in a hospital with an integrated service delivery system.
Hospitals offering acute care offer a limited range of services. Services provided include general medicine, primary health care services such as pediatrics and family medicine, surgery, and orthopedic surgery. It is common for risk managers in such hospitals to take on responsibilities such as quality improvement, infection control and patient safety. Such hospitals only have limited resources and the workload is also relatively light, making the position of risk manager exceptionally attractive. Many of these health care centers are commercially insured, which reduces the administrative burden for managing risk by providing financial support on claims. It reduces the responsibilities of the risk manager to risk prevention and mitigation of loss, identification of risks, risk analysis, management of negative events, and education of staff and generation of policies (Carol, 2009).
Healthcare workers should empower the patients in a way that will help them in reducing professional risks such as conviction for misconduct emerging from medical risks.
There has been a paradigmatic shift from reactive to strategic risk management. Strategic risk management views health care risks through one centralized incident reporting system which leads to improvements in communication and containment of risks, cost cutting and improved efficiency. For example, when a patient suffers injury while receiving treatment due to errors in the laboratory, this information should be filed through a centralized communication system and used for future precaution.
Impact of Risk Management
Healthcare is gradually becoming an expensive and complex task. There are many risks posed to patients, health care workers, the public, and other healthcare organizations. Risk management engages everyone in the process.
Different healthcare institutions have different risk management strategies, but they all impact on the healthcare workers, patients, and the cost of healthcare provision. Risk management is essential in reducing excessive spending in healthcare organizations. Healthcare costs linked to insurances, medical liability claims, and other patient safety issues can be reduced by limiting risk financing (American Society for Healthcare Risk Management, 2011).
Medical staffs face risks in their duties of delivering healthcare services. They should be satisfactorily compensated in the event that they suffer injuries while on duty (American Society for Healthcare Risk Management, 2011). They need to be equipped with adequate training and other necessary resources so as to enhance the risk management strategy. This training will reduce the chances of medical personnel and other hospital staff members having to appear in court due to ignorance. It is also necessary for the healthcare organization to have enough staff members so as to ensure effective risk management in healthcare organizations.
Risk Management and Government Regulatory Environment
Regulatory compliance refers to the policies and procedures that are applied in ensuring that regulations and rules governing hospitals and other health centers are followed. It gives the purposes of ensuring that medical practitioners and healthcare personnel are informed and able to take the necessary measures in complying with the laid down rules and regulations. The instruments that are accountable for the formulation of laws are: Conditions for Participation and Joint Commission Standard (JCAHO), Centre for Medicare and Medicaid services; HIPAA state laws, and Emergency Medical Treatment and Active Labor Act (EMTALA)” (Kavaler & Spiegel, 2003). JCAHO is an authorization body for hospitals which requires that hospitals comply with their safety and quality standards in order to receive a license to operate.
Health care in the USA is well regulated. This regulatory regime was created through the establishment of legal actions and regulations by the executive or professional organizations. Violation of these laws could result in imprisonment. This means that it is particularly beneficial for a person working (in the healthcare sector) to clearly understand these regulations. Healthcare providers must meet the set standards according to the Occupational Safety and Health Act (OSHA) and federal regulations. Risk standards can be promulgated through legal or practice guidelines and regulations (Kavaler & Spiegel, 2003).
Healthcare practitioners do not arrive at healthcare problems instinctively; their selections have been largely influenced by existing regulatory regimes which can employ the use of incentives and sanctions in their administration of these regulations. Regulatory systems put a lot of their attention on the safety of the patient.
Role of Interest Groups and Healthcare organizations
The Joint Commission on Accreditation of Healthcare Organization (JCAHO) is responsible for evaluation and accreditation of all healthcare organization and programs in USA. Their most recent duty is the 2001 promulgation of patient safety standards. JCAHO and other interest groups participate in risk management in the following ways:
Providing leadership: interest groups have been involved in providing leadership in healthcare, especially in reduction of risks and in advancing the principles of patient care. This is essential in balancing the quality of patient care and fiscal accountability. These interest groups present the data for all risk costs that had been presented by specified behaviors, the costs incurred in the management of these behaviors and the most suitable method for the elimination of the risks. They also provide an economic analysis of the cost incurred from the risks and the quantity of money is used on settlements and claims. According to these organizations medical errors were responsible for massive financial costs, and were rarely put into consideration when arranging the risks that face an organization in order of priority (Kuhn & Youngberg, 2002).
Organizations such as the Leapfrog have come up with an analysis that evaluates their efficiency, the labor costs and the outcome. Such organizations provide an analytical approach to risk management.
Improvement of the performance of organizations: they help in the development of reliable organizations, which are instrumental in the safety of healthcare organizations.
Strategies and recommendations for implementing risk management in health care organizations
Effective risk management should be both proactive and reactive. This means that it should be able to prevent risks while at the same time mitigating damages and minimizing losses. All healthcare institutions should ensure that their risk management systems are made to fit the demands of the organization.
The organization should establish safety guidelines and protocols, which should include proper training, ensuring proper supervision, oversight and compliance to these guidelines. There should be a means through which employees can report issues and problems without fear of punishment, retaliation or reprisal. Regular discussions with personnel should be held in order to review and learn from past events and come up with better methods for prevention and mitigation of damages and losses.
Entry and exit from buildings should be properly restricted. All buildings and equipment should be well maintained and in good condition. Members of staff, especially medical personnel who make direct patients with patients, should be well trained and certified on the use of equipment so as not to endanger other people. They should be properly informed on matters pertaining to privacy, and on how to handle patients. The health organization should have a means through which patients can air their complaints in order to resolve all arising issues amicably and avoid unnecessary lawsuits and deaths.
The institution should have legal counsel who keeps it informed on changes to laws affecting medical services. The administration should also ensure that all accounting and legal paperwork are filed on time. Health organizations that are not-for- profit should ensure that they provide enough charitable services in order to maintain their tax free status. Their financial cover should include an adequate insurance cover. The health organization should ensure the provision of quality healthcare services and avoid all forms of negligence.
Impact of risk management on health care policy making
Patient-centered care has been broadly recognized as one of the core dimensions of a quality health service in modern times. Informed policy making is essential if the organization is to allow dialogue between the health practitioners and patients about matters pertaining to risks, benefits, and alternatives of treatment. This should be performed when at the same time putting into consideration the personal circumstances of the patient, such as priorities and beliefs – if truly patient-centered care is to be provided. Risk management will see to it that these factors are taken into consideration when formulating policies for the organization. A well informed patient can be an active partner in making deciding about the care they will receive. This will give them realistic expectations about potential outcomes or effects of their treatment and also give them an extra layer of caution and protection against any errors or adverse proceedings. This reduces risks such as the possibility of lawsuits. If performed well, the process of informed decision-making builds trust and reduces surprise and distress in the event that adverse reactions or complications occur.
The healthcare provider should obtain informed consent. The provision of informed consent by the patient indicates the end point of an engagement process in which health practitioners supported the patient to make an informed decision where they agree to the healthcare services on offer. These consent forms are extremely crucial for risk management. This helps in protecting the hospital in the event of any problems.
Conclusion
Risk management is extremely pertinent to health organizations. It is the responsibility of the employers, employees, and policy makers to put together all the components of risk management. The safety and the quality of healthcare services provided are critical to healthcare service providers. Medical errors have resulted in financial and emotional strain to the healthcare organization, patients, their families, and society. It is, therefore, necessary to deal with the issue before it goes out of hand.
References
American Society for Health care Risk Management. (2011). Risk Managment Handbook for Healthcare Organizations . New York, Ny: John Wiley and Sons.
Carol, R. (2009). Risk Management Handbook for Health Care Organizations . New York, NY: John Wiley and Sons.
Heyman, B., Alaszewski, A., Shaw, M., & Titterton, M. (2009). Risk, Safety and Clinical Practice: Health care Through the Lens of Risk . Oxford: Oxford University Press.
Kavaler, F. S. (2003). Risk Management in Healthcare Insitutions: A strategic Approach . New York, NY: Jones & Barlett Learning .
Kuhn, A., & Youngberg, B. (2002). The Need for Risk Management to Evolve to Assure a Culture Safety. Qual Saf Health Care, 11 (1), 158-162.
