While historically, healthcare risk management strategies revolved around patient safety and reducing medical errors, it’s far more complex today. Beyond patient care, new healthcare technologies have significantly increased the need for risk management. 

With everything existing in the digital realm, cybersecurity has emerged as a major source of concern for healthcare industries. Another area that requires heightened risk management is the healthcare industry’s constantly evolving regulatory, legal, and political environment.

A risk management process, in a healthcare organization setting, can save a person’s life. It can prevent malpractice, minimize mistakes, and ensure patient privacy. Healthcare risk management involves a comprehensive approach, from updating prescription policies to installing firewalls to prevent cyber attacks.

Why is healthcare cybersecurity a risk management issue?

Your organization’s risk managers have a complex job: Not only should they be assessing and mitigating internal risks, but also third-party threats. Third-party risk in health care refers to information security: The healthcare industry is full of personally identifiable information, which is highly sought after by cyber criminals.

One way the healthcare industry has defended patient information is through the Health Insurance Portability and Accountability Act (HIPAA). Healthcare cybersecurity risk management is, in large part, ensuring HIPAA compliance.

HIPAA compliance isn’t just recommended for risk management; it’s required. HIPAA was signed into U.S. law not only to improve patient safety and privacy, but also to place safeguards on patient data, also known as protected health information or PHI. Organizations who violate HIPAA could face fines up to $25,000 per compromised record.

Beyond the vital role of protecting patient data, healthcare cybersecurity must also defend against ransomware attacks that can remotely disable lifesaving medical devices. This is why risk managers should ensure their organization maintains a robust cybersecurity system—one that can fend off data breach attempts and operational meddling. 

What are the key concepts of risk management in healthcare?

Many healthcare facilities today are taking a more holistic approach to assessing organizational threats by using the plan-based Enterprise Risk Management or ERM. strategy While each organization’s risk management plan will differ slightly, many ERM plans will follow key components: assessing risk, prioritizing risks, risk mitigation, and monitoring. 

Assessing risk 

Rather than being overwhelmed, use data and industry knowledge to successfully identify threats. Risk management managers should take advantage of institutional knowledge to uncover potential risks. Data can be a great way to illuminate negative trends and provide evidence-based information regarding medical errors or consistent problems within your organization.

Once you’ve done the work to identify threats, the next step is analyzing risk. It can be helpful to use factors including the likelihood of occurrence, what the occurrence’s impact would be on your organization, and the speed at which your organization will feel the impact. Another factor includes the potential severity of the occurrence: What’s the worst-case scenario?

Prioritizing risk

By identifying and analyzing risks, you’ll be on the right path to then prioritizing potential threats to your organization. Your risk managers should be able to rank risks based on their likelihood of occurrence and potential level of severity. This information will be useful for the next phase: mitigating risk.

Risk mitigation

The mitigation step is about making a rock-solid risk management plan to prevent specific threats outlined in the identification process. Your mitigation plan will provide options for handling potential risks, and outline prevention strategies including evaluating staff competencies and implementing proper education and training for your staff. 

Consistent monitoring

It’s crucial to lay out a framework for ongoing monitoring for potential new risks. One area where your risk managers should keep a close watch on is cybersecurity. Cyberattackers consistently develop new tactics for stealing information and causing data breaches, so ensure your risk managers are evaluating for new threats with your information technology team. 

The role of healthcare risk managers

When crafting a risk management plan for your organization, it’s vital to establish a risk manager. A healthcare risk manager should have a broad understanding of the potential threats and processes in multiple settings of your healthcare organization, whether it’s assessing quality control checklists or managing financial risk to your facility.

Risk managers are responsible for identifying potential injuries to your patients, staff, and visitors, and taking any prevention steps necessary. Risk managers should also be able to do risk assessments in various areas of your organization, including insurance management, incident reporting, clinical research, mental health care, and emergency preparedness.

For example, a risk manager should be able to develop a strategy that prevents an organization’s pharmacy from filling an expired prescription. Another role of a risk manager should be to increase or improve patient communication to prevent improper medication use. Risk managers also ensure quality of care by standardizing pre-op checklists before sending a patient into surgery.

A qualified risk manager will not only be able to assess your organization’s data to identify potential threats and risks, but also be able to develop a comprehensive mitigation plan.

How is risk management used in healthcare?

Risk management allows healthcare organizations to be responsive and proactive when it comes to various threats. When an organization identifies a new risk, it may be necessary to adapt and introduce a new process to mitigate future adverse events. 

It may be helpful for your organization to review other risk management studies for guidance. Guidelines from governing organizations such as the American Society for Healthcare Risk Management (ASHRM) can help ensure risk management compliance for your organization.

Risk management in healthcare is not only about ensuring patient safety and medical compliance, but also about managing third-party risks such as cybersecurity threats.