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What is Healthcare Risk Management?

By Dale Marshall
Updated May 16, 2024
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Healthcare risk management is the practice of identifying and preventing potential hazards within a healthcare setting. It’s practiced by all healthcare providers in order to meet the requirements both of the law and of liability insurance carriers. Thought by many to involve only those elements of patient care that could trigger medical malpractice charges against a practitioner, in fact it encompasses the entire range of services provided by a healthcare facility. Most facilities, in fact, assign the job of risk management to a senior official or dedicate a position primarily to that function.

Risk in a healthcare facility is the possibility of any adverse event that occurs anywhere in the facility to any person. For instance, the staff in a healthcare facility is just as much at risk as the patients, and in some cases their risk is greater. Patients, for instance, have a relatively small risk of being stuck with a used needle, but staff involved in using and disposing of needles are at much greater risk of accidentally being stuck with a contaminated needle. Healthcare risk management identifies, assess and manages all such risks, and takes steps to prevent mitigate their occurrence. For example, relevant personnel are trained on disposal procedures for sharps, or needles, and employees are trained on evacuation plans in the case of fire and other disasters.

The first step in healthcare risk management is to identify potential risk. This can encompass a wide range of situations and events in a healthcare facility. For instance, preventable errors that occur during the admission process in a hospital can result in medical staff relying on inaccurate information as they care for their patients. Unhygienic practices put patients at risk of infection, and may result in infestations of bacteria, insects and rodents. In addition, issues such as fire safety and fall prevention are just as important in a healthcare facility as in any other setting, but may be inadvertently overlooked because of the more obvious healthcare-related risks.

Once potential risk has been identified, it must be assessed. Although risk assessment can be a complex process, it essentially consists of determining the chances a particular risk will occur, and its impact on the facility. For example, the possibility of fire in modern healthcare facilities is relatively low, but the potential losses — especially loss of life — are so great that most facilities install costly fire command stations to assist firefighting personnel in the event of a fire. Likewise, a risk manager will work closely with the human resources department to ensure that staff are properly credentialed and vetted. In both examples, the cost of risk prevention pales in comparison with the cost of the risk occurring, whether in the case of a fire or the hiring of staff who are unsuitable for work in a healthcare facility.

Healthcare facilities, from small family practices to large clinics and hospitals, must be diligent in practicing healthcare risk management. Some practices, such as the installation of costly fire command stations, are mandated by law. Others are required by insurance carriers, and some have been developed by the facility’s own risk management team. Part of an integrated approach to patient care, risk management is recognized as a crucial element of modern healthcare.

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