Whether you’re a private practice or a large hospital, risk mitigation should be an integral part of the of the organizational process. While many organizations have emergency plans to handle obvious risks, it’s important to think about risk very broadly: risks can be anything that causes you to lose revenue (both current and potential).
For an organization to keep all risk factors controlled, a strategic framework can help streamline reactions and outcomes. This strategic framework should be anchored on a set of guiding principles that mirror the organization’s mission, vision, goals and objectives, key performance indicators, and key risk indicators. Guiding principles often include things like managing uncertainty, maximizing value protection, and optimizing organizational readiness.
With this framework, comprehensive risk management strategies can be developed for all revenue-threatening situations. A risk strategy development process typically includes three phases:
Phase 1 – Identifying Risk
When you’re identifying risk, it’s oftentimes easier and more effective to get assistance from a risk management professional. An unbiased, knowledgeable perspective can help you identify risks that you may otherwise overlook.
From this analysis, a “risk list” is then created, as in the example below:
Phase 2 – Assessing Risk
From there, the “risk list” should be reviewed and prioritized to a manageable level, providing cost-effective, easy-to-implement action plans for both “quick-fixes” and long-term process changes. When prioritizing risk, a matrix of likelihood (probability of the risk occurring) and impact (severity of the risk if it occurs), can provide a clear picture of mission-critical action plans.
Phase 3 – Developing Strategies for Value Protection and Value Creation
Recognizing how risk affects your current and potential value is important when shaping organizational processes designed to mitigate risk. It’s important that risk strategies are cost-effective, efficiently respond to risks, and are connected to data, so implementation can be easily tracked and monitored.
Conducting a cost-benefit analysis and a risk-reward analysis can be valuable when creating risk management strategies. Risk strategies should be embedded in every step of the organizational process from administration, to physician and nurse practices, and all levels of management.
Ultimately, the goal of your risk management strategy is to protect revenue and enable earning potential for your practice or organization. With streamlined processes implemented at every level, your value and assets are protected, and leadership can pinpoint process improvements.
At COORS, our team can assist in developing new, or streamlining existing risk management strategies. As a trusted partner for many healthcare organizations, our professionals have continued to help shape, evolve and implement proven risk mitigation processes. To learn more about how COORS can help you manage risk, contact our risk management professionals.