Managing Risk in a Healthcare Enterprise
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This document discusses business risk and the risk management process. It defines business risk as unexpected circumstances that could significantly impact a business's operations or finances. It then outlines a five step risk management process: 1) identifying potential risks, 2) evaluating the risks' likelihood and severity, 3) selecting control strategies, 4) implementing controls, and 5) monitoring risks and controls. It emphasizes that ongoing risk management is a core management responsibility.
Managing Risk in a Healthcare Enterprise
- 1. IN A HEALTHCARE BUSINESS ENTERPRISE
- 2. EVERY BUSINESS FACES RISK WHAT IS BUSINESS RISK?
- 3. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 4. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 5. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 6. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 7. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 8. EVERY BUSINESS FACES RISK UNEXPECTED CIRCUMSTANCES OF SUFFICIENT SEVERITY TO MATERIALLY IMPACT A BUSINESS’ OPERATIONAL CAPABILITY OR FINANCIAL INTEGRITY
- 9. UNEXPECTED DOES NOT MEAN UNFORESEEN
- 10. EVERY BUSINESS FACES RISK MAINTAINING A SYSTEMIC PROCESS TO IDENTIFY AND CONTAIN BUSINESS RISK IS A CORE FUNCTION OF MANAGEMENT
- 11. EVERY BUSINESS FACES RISK MAINTAINING A SYSTEMIC PROCESS TO IDENTIFY AND CONTAIN BUSINESS RISK IS A CORE FUNCTION OF MANAGEMENT
- 12. EVERY BUSINESS FACES RISK MAINTAINING A SYSTEMIC PROCESS TO IDENTIFY AND CONTAIN BUSINESS RISK IS A CORE FUNCTION OF MANAGEMENT
- 13. EVERY BUSINESS FACES RISK MAINTAINING A SYSTEMIC PROCESS TO IDENTIFY AND CONTAIN BUSINESS RISK IS A CORE FUNCTION OF MANAGEMENT
- 14. EVERY BUSINESS FACES RISK MAINTAINING A SYSTEMIC PROCESS TO IDENTIFY AND CONTAIN BUSINESS RISK IS A CORE FUNCTION OF MANAGEMENT
- 15. THE RISK MANAGEMENT PROCESS A FIVE STEP ROUTINE 1. Discovery of Potential Loss Exposure 2. Evaluation of Likelihood and Severity 3. Selection of Control Strategy 4. Implementation of Control Strategy 5. Monitoring / Feedback / Correction
- 16. DISCOVERY OF POTENTIAL LOSS EXPOSURE UNDISCOVERED LOSS EXPOSURES MUST NOT BE DISMISSED AS A “COST OF DOING BUSINESS”
- 17. DISCOVERY OF POTENTIAL LOSS EXPOSURE UNDISCOVERED RISK YIELDS UNCONTROLLED RISK RETENTION
- 18. DISCOVERY OF POTENTIAL LOSS EXPOSURE BE REALISTIC NOT EVERYTHING THAT CAN GO WRONG WILL GO WRONG
- 19. DISCOVERY OF POTENTIAL LOSS EXPOSURE FOCUS MANAGEMENT ATTENTION ON THOSE UNEXPECTED EVENTS WHICH CAN CAUSE MATERIAL DAMAGE
- 20. DISCOVERY OF POTENTIAL LOSS EXPOSURE TYPES OF LOSS EXPOSURE 1. Property 2. Liability 3. Key Personnel 4. Net Income
- 21. DISCOVERY OF POTENTIAL LOSS EXPOSURE USE ALL AVAILABLE RESOURCES TO IDENTIFY RISKS 1. Internal Resources 2. Industry and Regulatory Resources 3. Insurers 4. Consultants
- 22. DISCOVERY OF POTENTIAL LOSS EXPOSURE INTERNAL RESOURCES 1. Survey your own people 2. Consult your own history 3. Diagram your processes 4. Analyze your cash to cash cycle 5. Ask yourself “What if ………?”
- 23. DISCOVERY OF POTENTIAL LOSS EXPOSURE INDUSTRY AND REGULATORY RESOURCES 1. Professional Societies like the American Academy of Dermatology 2. Guidelines Promulgated by your Licensure Boards 3. ASHRM – The American Society for Healthcare Risk Management (www.ashrm.org)
- 24. DISCOVERY OF POTENTIAL LOSS EXPOSURE INSURERS 1. Professional responsibility carriers provide training courses and guidance 2. Property and casualty carriers also provide training and guidance
- 25. DISCOVERY OF POTENTIAL LOSS EXPOSURE CONSULTANTS 1. Industry-specific consultants can bring experience and fresh eyes 2. Learn from the mistakes of others 3. Knowledge of control techniques
- 26. EVALUATE EACH POTENTIAL LOSS EXPOSURE DIMENSIONS OF RISK 1. Frequency 2. Potential Severity 3. Realistic Range of Loss
- 27. DISCOVERY OF POTENTIAL LOSS EXPOSURE BE REALISTIC NOT EVERYTHING THAT CAN GO WRONG WILL GO WRONG
- 28. EVALUATE EACH POTENTIAL LOSS EXPOSURE GOAL OF THE ANALYSIS? IDENTIFY A PRACTICAL RISK CONTROL STRATEGY
- 29. RISK CONTROL STRATEGIES TWO CATEGORIES 1. OPERATIONAL 2. FINANCING
- 30. RISK CONTROL STRATEGIES OPERATIONAL 1. Risk Avoidance 2. Loss Control 3. Combination 4. Transfers of Operational Risk
- 31. RISK CONTROL STRATEGIES OPERATIONAL 1. Risk Avoidance 2. Loss Control 3. Combination 4. Transfers of Operational Risk
- 32. RISK CONTROL STRATEGIES OPERATIONAL 1. Risk Avoidance 2. Loss Control 3. Combination 4. Transfers of Operational Risk
- 33. RISK CONTROL STRATEGIES LOSS CONTROL 1. Prevention 2. Mitigation 3. Separation
- 34. RISK CONTROL STRATEGIES OPERATIONAL 1. Risk Avoidance 2. Loss Control 3. Combination 4. Transfers of Operational Risk
- 35. RISK CONTROL STRATEGIES OPERATIONAL 1. Risk Avoidance 2. Loss Control 3. Combination 4. Transfers of Operational Risk
- 36. RISK CONTROL STRATEGIES TWO CATEGORIES 1. OPERATIONAL 2. FINANCING
- 37. RISK CONTROL STRATEGIES FINANCING TECHNIQUES 1. Non-insurance financing transfers 2. Insurance 3. Retention/Reserves
- 38. RISK CONTROL STRATEGIES NON-INSURANCE FINANCING TRANSFERS 1. Contractual Indemnification 2. Guaranties 3. Warranties 4. Common Law Indemnification 5. Contribution
- 39. RISK CONTROL STRATEGIES NON-INSURANCE TRANSFERS RISK FINANCING OBLIGATIONS CAN BE TRANSFERRED FROM YOU OR TO YOU
- 40. RISK CONTROL STRATEGIES NON-INSURANCE TRANSFERS THE TRANSFER IS ONLY AS EFFECTIVE AS THE FINANCIAL CAPABILITY OF THE TRANSFERREE TO PAY THE BILL
- 41. RISK CONTROL STRATEGIES FINANCING TECHNIQUES 1. Noninsurance financing transfers 2. Insurance 3. Retention/Reserves
- 42. RISK CONTROL STRATEGIES INSURANCE A risk financing technique with a financially responsible partner, but with strings attached.
- 43. RISK CONTROL STRATEGIES INSURANCE 1. Scope of Coverage 2. Adequacy of Amount 3. Conditions on Claim 4. Conditions on Payment
- 44. RISK CONTROL STRATEGIES FINANCING TECHNIQUES 1. Noninsurance financing transfers 2. Insurance 3. Retention/Reserves
- 45. RISK CONTROL STRATEGIES RETENTION/RESERVES 1. A decision to retain the financing burden of a risk should be made only after carefully evaluation. 2. No risk should be retained without providing a specific and committed reserve.
- 46. THE RISK MANAGEMENT PROCESS A FIVE STEP ROUTINE 1. Discovery of Potential Loss Exposure 2. Evaluation of Likelihood and Severity 3. Selection of Control Strategy 4. Implementation of Control Strategy 5. Monitoring / Feedback / Correction
- 47. IMPLEMENTATION OF THE CONTROL STRATEGY MAKE A PLAN 1. Document the risk you have identified and the evaluation you have made. 2. Document the reasons for your selection of a control technique 3. Assign responsibility and set deadlines 4. Follow through
- 48. THE RISK MANAGEMENT PROCESS A FIVE STEP ROUTINE 1. Discovery of Potential Loss Exposure 2. Evaluation of Likelihood and Severity 3. Selection of Control Strategy 4. Implementation of Control Strategy 5. Monitoring / Feedback / Correction
- 49. THE RISK MANAGEMENT PROCESS RISK MANAGEMENT IS A CORE MANAGEMENT FUNCTION
- 50. THE RISK MANAGEMENT PROCESS MAINTAINING THE ENTERPRISE RISK MANAGEMENT PROCESS IS THE RESPONSIBILITY OF THE CHIEF EXECUTIVE OFFICER
- 51. Douglas O. Guffey Jaburg Wilk, PC 3200 N Central Avenue, 20th Floor Phoenix, AZ 85012 602-248-1039 dog@jaburgwilk.com www.jaburgwilk.com
Editor's Notes
- #14: A logical and continuous process
- #15: Contrast with entrepreneurial function of identifying business opportunity and weighing potential benefit against potential cost.
- #21: Think outside the box. A risk to property can be a risk of obsolescence. A risk to key personnel can be failure to maintain needed skills or even things like drug dependency and depression.
- #24: ASHRM publishes a Journal
- #25: ASHRM publishes a Journal
- #26: ASHRM publishes a Journal
- #27: ASHRM publishes a Journal
- #29: ASHRM publishes a Journal
- #34: Example: Fire