Health Systems Risk Management Series: The Basics
Risk Management is the discipline in which we identify plan, document and track issues in an effort to eliminate, mitigate or accept the possibility of harm to our organization. That harm can take the form of financial or legal consequences or the loss of reputation and marketshare. In the words of Louise Underdahl, Ph.D., risk management is “identifying anything that happens that shouldn’t and deciding our response to it.”
In addition to the traditional risks of doing business stemming from physical causes such as natural disasters and accidents, risk management in a health system also encompasses improving patient safety and even addressing perceptions of care. For example, a patient may be happy with the outcome of his hospitalization but feel he was treated with disrespect and thus suffered a “loss.” He may seek compensation, perhaps in the form of a discount on his bill. Or a patient dies leaving her family to wonder if the physician did enough. If dissatisfied with the medical review of the case, they can sue for malpractice.
In more than 30 years as a Risk Analyst for the UCLA Health System, Dr. Underdahl has seen just about everything. Recently, a patient in the emergency room filed a claim for property damage stating that a staff member spilled orange juice on her cell phone. Performing her due diligence, Dr. Underdahl found that several people witnessed the patient using the cell phone after the spill—so no responsibility was accepted on behalf of the medical center for the mishap. “Sometimes,” says Dr. Underdahl, “we must have an empathetic ear for things we aren’t responsible for.”
Such cases highlight the simpler side of risk management. Some of the more complex issues involve serious business issues such as a server crash or earthquake, in which all patient records would be lost. The solution—keep a backup system or server in another part of the country.; or the toughest cases involving human suffering. To be effective, risk managers in a health system must continually evaluate all clinical and functional areas, as well as environmental services and property management.
Dr. Underdahl says, “Reducing risk is so much less expensive than picking up the pieces later.”
Trends in the field include a move toward enterprise risk management and business continuity planning. Enterprise risk management entails creating workgroups with representatives from diverse disciplines and brainstorming how to reduce risk. For example, bringing personnel from purchasing and environmental services together with an ergonomics professional to choose office equipment that doesn’t hurt employees’ backs or cause eyestrain, to lower workers’ compensation claims. Business continuity planning involves identifying the essentials necessary to keep the business operating. In other words, if a disaster struck, what would you need?
As a result of Dr. Underdahl’s risk management experience, she is never one to take anything for granted—especially her words. “I’ve learned there are consequences for everything. Whenever I speak, I am careful to consider how the person is going to take what I’ve said.”
Risk manager or not, that’s a lesson we can all stand to learn.