The Importance of Risk Management in Healthcare

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A healthcare risk manager presents to hospital administrators.The health care industry is becoming increasingly reliant on technology and big data as it’s driven by initiatives such as telemedicine and electronic health records (EHRs). Amid these changes, health care organizations need to prioritize risk management in health care. Risk management affects not only patient outcomes but also an organization’s financial and operational success. Professionals considering a risk management career can seek an advanced degree in health information management.

The Purpose of Quality Risk Management

Risk management in health care provides an organization with the opportunity to mitigate any risk that may financially harm it. Risk managers develop strategies to manage risks related to patient record access and protection. Risk managers also implement contingency plans for unexpected catastrophic events and evaluate administrative systems and processes that enable operational and financial efficiency. All employees must be trained in risk management principles, so they can reduce risk as they perform their job duties.

Protecting Patient Records

Risk managers use various strategies to help facilities protect patient records yet remain available to patients. The Health Insurance Portability and Accountability Act (HIPAA) has regulations that apply to all areas of protected private health data, including how the information is protected, when and with whom information can be shared, and how patients should be notified of privacy policies and data breaches. Violations of these regulations can expose a health care organization to risk.

Implementing a Contingency Plan for Catastrophic Events

Risk management plans include contingencies for catastrophic events, such as a natural disaster or a cyberattack that wipes out EHRs. These contingency plans may also outline a system to control disease outbreaks, such as methicillin-resistant Staphylococcus aureus (MRSA), which is an infectious disease that easily spreads among patients and can have dire financial repercussions for hospitals. Lastly, risk managers should develop an organizationwide reporting system that allows medical professionals to quickly and accurately report any medical mishaps, risks or disastrous events.

Identifying and Fixing Process and System Deficiencies

Health care risk managers focus on monitoring information systems and other technology as well as operational and financial systems. A key process that risk management professionals use is a failure mode and effects analysis (FMEA), which helps identify deficiencies in a system or process. This approach requires organizing a workflow process, calculating risk factors and addressing steps to overcome these risk factors. These risk factors are then evaluated to predict the probability of failure.

Risk Management Strategies in Health Information Management

Health information management professionals can apply risk management in health care principles to technology-driven health care delivery via telemedicine, EHRs and other forms.

EHRs are especially important in providing medical professionals with the necessary information to deliver the best patient care. Therefore, risk management professionals must secure and develop these systems, which may entail updating telemedicine services by hiring information technology (IT) professionals to manage them. Risk managers may also consider purchasing billing insurance that can protect an organization from the financial repercussions of billing errors due to EHR system failures.

IT risk management strategies and HIPAA compliance impact both patients and providers. IT risk management strategies protect electronically transmitted patient health information. Risk management professionals must work with the IT and legal departments to ensure that patient data is protected at all stages of patient care. Risk management professionals also provide employees with health care privacy and security training to ensure that no malpractice occurs, which could lead to lawsuits. Lastly, risk management professionals generally require that all IT contractors and business suppliers comply with HIPAA business associate agreements.

The Skills Needed for Effective Risk Management

Health care risk managers must develop various core competencies to excel in the field. Essential core competencies include strong technical, programming, problem-solving and communication skills. These skills are fundamental to effectively oversee risk management strategies.

  • Technical. Risk management professionals need to develop technical skills, especially those pertaining to health care technology. Understanding the latest software gives them the expertise to manage data systems and monitor billing.
  • Programming. Risk management professionals with coding experience can manage EHR software, medical database software and telemedicine software. The market value for telemedicine is expected to reach $64 billion by 2025, according to Netguru.
  • Problem-solving. Risk management professionals must be able to find solutions to problems that may not have occurred yet. This requires them to develop systems that can mitigate potential risk to patients and the organization’s financial security.
  • Communication. Health care risk managers must be efficient communicators. One of their job responsibilities is to develop health care privacy and security training for employees. This responsibility requires them to effectively communicate protocols and regulations. Moreover, they must communicate with IT professionals the protocols and systems necessary to remain HIPAA compliant.

Discover a Rewarding Career in Health Care Risk Management

An advanced degree in health information management can provide professionals with the necessary skills to be effective leaders in the health care field. The University of Illinois at Chicago’s Master of Science in Health Information Management program provides prospective students with an in-depth curriculum taught by distinguished professors. Students are required to take various core classes, including Health Information Technology and Systems, Quality Management & Data Analysis, and Executive Healthcare Financial Management.

Explore how UIC’s online Master of Science in Health Information Management degree can prepare students for a future in the vital field of risk management in healthcare.

Recommended Readings

What Are Information Systems and How Do They Benefit Healthcare?
What Can I Do with a Master’s in Health Informatics?
What Is Health Information Management? Comparing HIM vs. Health Informatics


American Society for Health Care Risk Management, Health Care Risk Management Professional Overview
American Society for Health Care Risk Management, Telemedicine Risk Management Considerations
FMEA Training, FMEAS and Risk Management, Improved Diagnostics & Patient Outcomes
HIPAA Journal, HIPAA Risk Assessment
Journal of AHIMA, OCR Acting Deputy Director Talks Management at Advocacy Summit
NEJM Catalyst, What Is Risk Management in Healthcare?
Netguru, “13 Types of Healthcare Software”
PRMS, Electronic Health Records
U.S. Department of Health and Human Services, Guidance on Risk Analysis
U.S. Department of Health and Human Services, Health Information Privacy