Demonstrating Risk Management Value
July 1, 2011 | Health System Risk Management
Faced with finite resources, a healthcare institution must examine its budget and the contributions various departments make toward helping it fulfill its mission. In response, risk management, like other administrative departments, must be able to clearly demonstrate its value. Because risk management departments are not revenue generating, unlike, say, a cardiovascular service that contributes to an organization’s bottom line, risk managers are concerned that if senior leaders do not understand their department’s role in the organization’s success, staff and budgets may be cut.
In the two years that the Healthcare Risk Control(HRC) System has surveyed its members about the challenges in the year ahead, demonstrating risk management value has been among the top five concerns. In 2010, 48% of responding risk managers cited demonstration of risk management’s value as among their top worries for the coming year (ECRI Institute “Top Concerns 2011”); in 2009, 44% of respondents identified this as a hurdle (ECRI Institute “Top Challenges 2010”). An American Society for Healthcare Risk Management (ASHRM) monograph on risk managers’ strategies for success echoes the HRC survey findings. “Do you wonder whether your risk management efforts are valued by your organization?” the monograph begins. “You’re not alone.” (ASHRM “Strategies”)
Compounding these concerns is the arrival of multiple patient safety and quality reporting requirements imposed by accrediting agencies, federal and state governments, and others. Unless they are participating in the organization’s quality improvement and patient safety projects, risk managers face the difficult challenge of conveying the value of what they do for the organization in the shadow of these high-visibility initiatives.
Risk managers’ strategies to demonstrate their impact on the organization range from grassroots strategies—such as being a visible resource...