Risk Management in Healthcare

• Risks are an essential part of everyday life and risks are unavoidable in any complex setting or program. 
• Healthcare risk management is a collection of systems and processes that are used to uncover, mitigate, and assist in preventing dangerous mistakes and costly errors in healthcare organizations. 
• The process of risk management in healthcare is an important process that managers should maintain in an organization due to the inevitability of risks and the importance of having strategies in place to deal with the prospective risks. 

Risk Management in Healthcare

Analyze.  Identify.  Develop.  One may think that these words are heard often and are used frequently within healthcare organizations, but many times the words are discussed but not fully understood.   

Another important word that many hear in healthcare is “risk”.  Risks are an essential part of everyday life and risks are unavoidable in any complex setting or program.  Healthcare risk management is a collection of systems and processes that are used to uncover, mitigate, and assist in preventing dangerous mistakes and costly errors in healthcare organizations.  As a healthcare member, it is important to understand the following involving risk management: 

• What is the importance of risk management? 
• What is an example of nursing risk management?  
• What are the four key elements of risk management in healthcare?   

Importance of Risk Management in Healthcare

As any healthcare member can attest, some days on the job are chaotic and unfortunately mistakes can be made.  Nurses and others in healthcare try their best not to make mistakes, but they still occur and happen.   

Due to the errors and slip-ups that can occur along with the potential consequences, risk management procedures are put into place to assist with these occurrences and to formulate strategies to help minimize and effectively deal with these risks.   

The important role of patient safety and a reduction of medical errors that can jeopardize an organization’s ability to achieve its mission and protect against financial liabilities is an important reason for risk management measures.   

However, with the advancement of healthcare technologies and the ever-changing legal, political, and regulatory aspects, risk management in healthcare has become more complex.  Due to these factors, many hospitals and healthcare organizations are expanding their risk management programs to focus more on proactivity and viewing risks through a much broader lens of the entire healthcare system.  

Example of Risk Management in Nursing

As a nurse working in a hospital environment, consider the following scenario: 

There are two patients in one room, and due to a hurried case of misidentification, one patient is given a medication that is intended for the other patient.  The distraction may have been caused by the nurse being in a hurry, another emergency occurring, or just plain tiredness from an employee working a 12-hour shift.  This example serves as the situation’s risk.  It is important to keep in mind that although there are many risks in a hospital, consider this one risk at present and what the potential consequences may be.  The consequences could be that the medication could be benign and do no harm to either patient; patient A could have an adverse reaction to the wrong medication given to him/her; patient B could have an adverse reaction from not receiving a necessary medication; or both patients may be negatively affected by the error made.   

In this situation, the risks of not properly checking the medication before it is given needs to be identified and once it is identified, the nurses and administrators can work towards mitigating the risks.   

It is important to note that all outcomes have variations such as the following: 

• an adverse reaction may be a slight fever which is typically easy to recover 
• an adverse reaction that is not easy to recover 
• an adverse reaction that can potentially lead to death 

Nurses must be trained in risk assessment in order to have the capability to review a list of potential outcomes and rank them in terms of severity and likelihood for each situation or occurrence.

Key Elements of Risk Management in Healthcare

Risk management is important and necessary in all organizations, but it seems to be even more important among healthcare organizations to promote safety and high reliability.   

The goal of risk management is to realize and develop a better understanding of the risk and to evaluate the consequences and the likelihood that these consequences may occur with patient safety, persons involved in providing healthcare, and the organization itself.   

By conducting risk assessments, an organization can distinguish minor acceptable risks from the major unacceptable risks and to provide data in a way that assists with the evaluation and treatment of risks.  

The risk management process is a clearly defined method of understanding what risks and opportunities are present, how they affect an organization, and how to respond to them.   

The four essential steps are as follows: 

Identify the Risk

Identify all the events that negatively (create a risk) or positively (create an opportunity) that affect the objectives of a specific project 

Assess the Risk

There are two types of risk and opportunity assessments: qualitative and quantitative.  Qualitative analyzes the probability of the event and its impact on the organization and quantitative analyzes the financial impact or benefit of the event.  Both are necessary and important for a complete and comprehensive evaluation of risks and opportunities.   

Treat the Risk

For an organization to treat risks, strategies for doing the risks must be first identified by developing a treatment plan.  The objective or goal of the plan is to reduce the probability of the occurrence of the risk and/or to reduce the impact of the risk.

Monitor and Report the Risk

Risks and opportunities and their treatment plans need to be monitored and reported based on the critical nature of the risk and/or opportunity.  The development of a monitoring and reporting system will ensure that appropriate responses and actions are being implemented.  

The Bottom Line

The process of risk management is an important process that managers should maintain in an organization due to the inevitability of risks and the importance of having strategies in place to deal with the prospective risks.  The long-term survival of an organization depends greatly on the ability of an organization to identify, assess, treat, and monitor the risks involved in any planned project.   

Risk management is necessary and needed and allows past incidents, losses, and liability reports to be reviewed to identify potential problems before they occur so that risk-assisted activities may be planned and used to mitigate adverse impacts on achieving objectives.   

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