Managing a Multifacility Risk Management Program

May 11, 2021 | Health System Risk Management


This Risk Analysis focuses on managing multifacility risk management programs in newly created or recently expanded healthcare systems and is divided into three main sections:

Risk managers developing or evaluating multifacility risk management programs should pay careful attention to the differences in best practices for larger versus smaller systems. For example, an inclusive committee structure for systemwide risk management planning that is realistic for a two- or three-hospital system may be impractical in a large system with dozens of facilities located throughout the country. The recommendations contained herein must be tailored to each situation. Even though each system is unique, each has an impact on the success of the systemwide risk management program. The ultimate measure of risk management program effectiveness is based on the total number of claims and potential claims, the cost of claims to the organization, and the total cost of risk along with the results of program structure and process assessments.

Mergers and acquisitions among healthcare organizations are commonplace; many organizations will experience additional changes in the future as local systems form and re-form, combine with regional organizations, and/or become subsumed into nationwide chains. As a result, many risk managers will feel the effects of organizational and management reshuffling that almost always accompanies such changes.

The vast majority of mergers and acquisitions are directly or indirectly motivated by financial considerations. These may involve, for example, short-term cash crises caused by overly aggressive expansion, a gradual decline in economic viability due to permanent changes in local or national market conditions, the desire to keep a charitable mission alive, or a strongly held belief in the long-term strategic necessity of joining forces with others even in times of plenty. Regardless of the motivation for merging, risk managers cannot ignore the fundamental financial nature of the transaction, even if they are more focused on the transaction’s impact on patient safety and the quality of care. Senior management will inevitably expect all programs under the new structure or organization to demonstrate their ability to improve or stabilize the bottom line.

Risk managers will respond successfully to the challenges presented...

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