Developing a Risk Management Program

The role of risk management in any business or operation is to protect the organization from losses. Risk management accomplishes this goal by identifying, evaluating, and reducing the likelihood of losses from the various risks the organization encounters. In healthcare, these risks can affect patients, staff, and others who visit the facility's premises, use its services, or do business with it, as well as the organization itself.

Healthcare risk management programs were initially developed in response to an unstable insurance marketplace in the late 1960s and mid to late 1970s, fueled by crises of insurance affordability and availability. Risk management programs were originally designed to better manage claims costs and create stability. Over time, the programs evolved to include risk identification and reporting, claims and litigation management, and risk financing. (Carroll "Where We've Been")

Recently, with attention on medical errors as the third leading cause of death in the United States (Makary and Daniel), healthcare leaders have made safety and quality of care among the top priorities for their organizations (Austin et al.). The focus of their efforts is error prevention and reduction of patient harm from errors.

​​Enterprise Risk Management: An Overview

Patient Safety, Risk, and Quality

In response, risk management departments at provider organizations have evolved from reactively managing and defending claims to proactively developing programs to ensure patient safety and therefore avert claims and lawsuits. As discussed in the guidance article Patient Safety, Risk, and Quality, risk managers have joined with their colleagues in patient safety and quality improvement to systematically identify the underlying causes of errors and implement organization-wide error prevention initiatives. Although patient safety is a major driver for risk management departments, healthcare organizations confront other risks beyond clinical ones, including legislative and regulatory compliance, workforce challenges, and natural and human-made disasters. ​...