Evolution of Healthcare Enterprise Risk Management (ERM)

Evolution of Healthcare Enterprise Risk Management (ERM)

To expand the role of risk management across the organization, hospitals and other healthcare facilities are adopting a more holistic approach called Enterprise Risk Management. ERM includes traditional aspects of risk management including patient safety and medical liability and expands them with a “big picture” approach to risk across the organization.Risk Management and Healthcare Policy Essay.

ERM encompasses eight risk domains:

1. Operational
2. Clinical & Patient Safety
3. Strategic
4. Financial
5. Human Capital
6. Legal & Regulatory
7. Technological
8. Environmental- and Infrastructure-Based Hazards.Risk Management and Healthcare Policy Essay.

Figure 1.

According to the American Society for Healthcare Risk Management ( ASHRM), “Enterprise risk management in healthcare promotes a comprehensive framework for making risk management decisions which maximize value protection and creation by managing risk and uncertainty and their connections to total value.”Risk Management and Healthcare Policy Essay.

ERM also stresses the use of technology to synchronize risk mitigation efforts across the entire organization and remove risk associated with siloed departments or business units. Additionally, data analytics are embedded to support decision-making, departmental cohesiveness, risk prioritization, and resource allocation. Analytics are important for monitoring benchmarks as a way of showing value (what costs were prevented) for ERM initiatives. These elements of ERM are built on top of a governance structure that aligns business operations with the risk management program.Risk Management and Healthcare Policy Essay.

The role of the healthcare risk manager has evolved alongside this new governance structure to oversee and facilitate the ERM framework. Risk managers proactively identify risks and estimate potential consequences and upsides. They also develop response plans incase risks become reality. On the flip side, to mitigate organizational exposure, they respond and execute containment plans when adverse and unforeseen situations transpire.Risk Management and Healthcare Policy Essay.

Due to the dynamic and multifaceted nature of risk management in healthcare, the role is constantly evolving. Some of the current responsibilities of the healthcare risk manager include communicating with stakeholders, documenting and reporting on risk and adverse circumstances, and creating processes, policies, and procedures for responding to and managing risk and uncertainty. Additionally, risk managers must continually monitor the ever-shifting landscape of the healthcare risk continuum.Risk Management and Healthcare Policy Essay.