The term risk implies the aspect of loss. Identification of risks is the primary role of the risk management team in organizations. Risk analysis entails determining the severity of loss from a specified risk, evaluating its chance of happening, and choosing the best alternative mitigation strategies (Cole, Chaudhary, & Bang, 2014). The healthcare industry faces numerous key risks that fall into various domains (Youngberg, 2011). The healthcare industry exposes itself to rewarded risks, which are believed to hinder value creation (Cole et al., 2014). Examples include new business creations, patient care models, and clinical services meant for value addition. Cole et al. (2014) place inter-relationships of healthcare risks into strategic, operative, fiscal, social capital, regulatory, and technology domains. These domains enable health organizations to identify risks and develop sound mitigation strategies.
Youngberg (2011) identifies various critical risks facing the healthcare industry. These risks include inadequate preparedness for pandemics, violent incidents in hospitals, and disruptive staff behavior. Other risks are telemedicine, cyber-crime, healthcare-related infections, and emergency unpreparedness. Hospitals face a major challenge of delivering quality and undisrupted care due to inadequate preparation for pandemics such as Ebola and other highly infectious diseases. Recent research indicates that violent incidents have become common in hospitals, which expose patients and medical practitioners to risk. Additionally, cases of assault, homicide, and rape have also been reported. Violent incidences increase operational costs for hospitals, particularly those incurred in compensations, treatments, repairs, and rebuilding damaged reputation (Cole et al., 2014).
Technological advancement coupled with rising patient numbers have pushed hospitals to use telemedicine that helps to deliver services to hospitals and remote locations. The use of telemedicine by physicians, particularly those with inadequate training in the technology, can cause allegations of negligence. Also, there are no clear regulations in place that govern the use of telemedicine. As such, hospitals and physicians face the challenge of handling telemedicine risks (Youngberg, 2011). Cyber risks have attracted the attention of healthcare risk managers given the increased push for the integration of electronic systems in healthcare. Healthcare organizations find it difficult to protect patients’ confidential information given their exposure to cyber risks (Cole et al., 2014). Moreover, data breaches and network disruptions pose a big threat to electronic health records.
Risk Intelligent Enterprise
Given the numerous risks that threaten the healthcare industry, risk management departments ought to embrace proactive strategies for their mitigation (Cole et al., 2014). The risk intelligent enterprise is a vital system that risk managers can use to perform their core functions. Effective risk governance requires an approach that appropriately integrates risk management efforts with the creation of value (Youngberg, 2011). The risk intelligent enterprise helps to develop a full continuum of the organization’s risk. It helps the risk manager to apply the core functions of management by developing a rational strategy that spans the entire organization (Cole et al., 2014). It helps one to develop a clear understanding of the various constituents of risks, whose details cannot be covered adequately by people (Youngberg, 2011). The risk intelligent enterprise helps risk managers to open lines of communication to other related stakeholders including regulatory bodies, finance, insurance, and audit among other risk-related components. With the help of the risk intelligent enterprise, risk managers have a broader understanding of risk portfolio faced by the organization (Youngberg, 2011). It enhances proper decision-making and the direction of action towards managing risks that create additional value.
Cole, S. A., Chaudhary, R., & Bang, D. A. (2014). Sustainable Risk Management for an Evolving Healthcare Arena. HFM (Healthcare Financial Management), 68(6), 110-114.
Youngberg, B. J. (2011). Principles of Risk Management and Patient Safety. Burlington: Jones & Bartlett Publishers.