Risk Management in Health Care Institutions

What Is Risk Management

An organized effort to identify, assess, and reduce, where appropriate, risks to patients, visitors, staff and organizational assets.
Designed to reduce the incidents of preventable accidents and injuries to minize the financial loss to the institution sh

Four steps in risk process to protect assets:
1. risk identification
2. risk analysis
3. risk control/treatment
4. risk financing

Identifying exposure to loss
Examine alternative techniques to deal with events
Select best technique
Implement technique
Monitor results for effectiveness

3 Major Functions

Reduce risk of malpractice
Reduce probability of PCE (potentially compensable event)
Preserve assets once claim filed.

Risk Manager Skills

art of persuasion
keen listener
team builder

APO

Adverse Patient Outcome

Types of Risk

Property Risk- structural, vehicle, theft, etc.
Casualty/Liability Risks - PCE APO work comp, etc.
Employee Benefits Risk - cost of benefit plans, disability claims, etc.

Red Flag Areas

Treatment conditions - poor results, repeat problem, lack of f/u, equipment malfunction.
Patient relations - dissatisfied pt, complaining relatives, ama, poor physician, poor staff.
Practice management -- poor records, lack of policy & procedures.
Conduct

Risk Tools
1. Incident Reporting
2. Occurrence Reporting
3. Occurrence Screening

Prompt identification of event needed. Systems to accomplish identification: incident reporting (events), occurrence reporting (list of specific occurrences i.e. sentiential events), occurrence screening (variations from normal procedure).

5 I's
investigate
inform
influence
interpret
integrate

examination and inquiry
present in material form
affect by indirect or intangible means
present in understandable terms
form or blend into whole or unite with something else

Risk Identification -- collection of information about past and current events
Risk Analysis - evaluation of past experience and current exposure to limit impact of risk.

Risk Control/Treatment - organizations response to signficiant risk areas to limit liability associated with events.
Risk Acceptance - risk that cannot be avoided

Risk Identification -- collection of information about past and current events
Risk Analysis - evaluation of past experience and current exposure to limit impact of risk.
activities.

Risk Control/Treatment - organizations response to signficiant risk areas to limit liability associated with events.
Risk Acceptance - risk that cannot be avoided

Exposure Avoidance - rid the service, personnel or equipment that may cause loss.
Loss Prevention - early detection and investigation...education, prevention, informed pts.
Loss Reduction -- management of claims and preparation of records and personnel.

Exposure Segration - separate out or duplicate offending services, personnel, or activities identified as exposure risks.
Contractrual Transfer - farm out high risk services.
Risk Financing - analysis of direction expenditures and funding losses with risk

Risk Management Activities

Designated Risk Manager
Access to all necessary credentialing, management & medical data
Resources through written policy
System to identify review and analyze adverse outcomes
Centralize risk data for analysis and trending
Risk Managers report and review

JCAHO - Joint Commission on Accreditation of Healthcare Organizations.

For JCAHO hospital must provide: 1. quality and risk management;

2. Admin indentification of potential pt safety care risks, evaluation of the cases, correction, design programs to reduce risk to pt care & safety;

3. Link between risk and quality related to pt care and safety; with information re pt care and safety made available to risk and quality.

AHA - American Hospital Assocation. RM - Risk Management. QA - Quality Assurance.

Quality Control - process assuring standards are met. Objective is 100% -- zero defects. Doing what you want to do, meet standards.

Risk Control -- assures losses are prevented, reduced in frequency/severity, or transferred. Not doing what you don't want to do-preventing errors.

Risk Management Committee -- assist in prioritization of risk reduction acivities and act as liaison to professional staff in hospital. Reviews key risk exposure. Should contain mix of clinical and technical presonnel.

Chaos theory -- order can be found in disorder.

Choas theory links to risk: 1. predictable patterns exist in apparent random events.

2. There is sensitive dependence on initial conditions -- small event need to studied and related to larger outcomes.

3. RM's deal with deiscrete or chance events -- over time specific patterns begin to materialize which produces information.

4. RM's must comprehend the network of forces and external influences that determine evenutal outcomes.

5. Move from the conspicuous and make connections ot the imrpobable. RM's must adpt new ways of looking for risks.

Risk Mnagement FUnctions:
1. Incident Identification
2. Reporting
3. Tracking

Actions to prevent recurrence of incidents must be documented in written record == PACED - Preventative, Administrative, Corrective, Educational, and Documentary

Preventative -- include pt relations program, employee newsletter, formal safety & Security prgoram, community input effort, ongoing planning coordination & review fucntions.

Administrative -- active process, invovlement of department heads.

Corrective -- encouragement of problem identification and monitoring of problem sitautions - internal audit functions and expeditious problem resolution.

Educational - interdepartmental education, upgrading medical and tehcnical skills, pt education prgoram and maintaining records of each.

Documentary - attention to personnel files, financial records, medical charts, regulatory requirements and written policy & procedure.

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.Enterprise Risk Management differ from Traditional Risk Management?

Enterprise Risk Management focuses on a broader view than risk management. The head of Enterprise Management. Is called the Chief Risk Officer. The authority is over all departments rather than one. It can be more efficient and participates in higher leve

Statistical Predictive Models -- Gobbons model for predicting medical malpractice:

claim risk increases me, surigical, between 40 and 60, after first claim risk increases in 1st year, education has been beneficial

Cindynics -- the science of danger - for organizatons - concerned with the dicipline of hazard identification Mathematical and involve complex reasoning to describe hazard and catsdytophrd.

Pts view risk in more concrete terms... when can it happen, how permanent a negative might be. Most pts want their chances of hazard in a statistical number or in a "poor" or "excellent" value.

It is vital to illustrate that Risk program contributes to institutions survivial and quality of care delivered.

Reason risk management is necessary is that adverse events and claims do happen.

Risk identifies, analyzes and treats risks which quali8ty assessment works to eliminate.

JCAHO defines QA -- formal ysstematic program by which care rendered to pts is measured against established criteria.

Quality Management (QM) - monitoring and evaluating quality issues followed by changes in the system of healthcare.

Monitoring systems necessary to ensure problems are identified early and appropriate intervention initiated.

85-15 Rule -- 85% of errors occur due to system failures, 15% human fault.

85-15 Rule -- it's best to look at the system rather than the fault of the individual in order to correct the process and prevent reoccurence.

TQM -- Total Quality Management -- focuses on the system not the individual.

1. Quality can be measured and is important. 2. People are critical part of solution not necessarily problem. 3. Change is fundamental and present, and can be managed to improve organization.

TQM a broad concept that includes CQI continuous quality improvelement.

TQM is process used to improve ability to satisfy customer expectations with recognition of central importance -- the customer.

TQM is positive strategy for growth and should be integrated into strategic business plan.

Top management must be committed and actively involved in the TQM process.

TQM is a process not a program.

Quality Improvement processes must be applied to all levels of organiation.

Quality improvement benetfist everyone both internally and externally.

hot groups -- those that managers cannot control, indvidual members are self motivated

CQI -- continous quality improvement. CQI focusses on techniques to accomplish positive change by assessing a process that leads to intervention.

Sentinel event -- single occurrence of sufficient concern to trigger a systematic resonse.

Tools for Evaluation: RCA and failure mode, effect, and criticality analysis.

RCA identifies not only direct cause such as user error, but also indirect causes or latent errors.

JCAHO requires one high-risk process a year be subjected to failure mode, effect, criticality analysis.

FMECA - Failure Mode, Effect, Criticaity Analysis - examines the steps in the system that failed and led to the adverse outcome.

QIT - Quality Improvement Team - effector of change. Customer central to its urporse.

9 Quality Improvement Factors define the process:

1. State the objectives.

Decide mission consistent with company, state objectives in relation to mission.

2. Identify the customers:

Determine what customers want, need, and require from company to meet their needs.

3. Understand how the process works now.

Identify process and perform flow analysis to locate problems which may be studied further.

4. Collect data

Focus on problem and subject data to analyis to determine cause and effect.

5. Decide on a solution

Develop plan of action to solve problem.

6. Implement the plan.

Initiate actions to solve problem.

7. Evaulate the plan.

Determine success or failure of the plan of action.

8. Improve the process

Redraft objectives or mission - determine effect on customer and reconsider the plan.

9. Create new plan

Incorporate learning from prior efforts.

Quality Planning Road Map

1. Identify customer. 2. Determine needs of customer. 3. Translate needs into our language. 4. Develop product features to respond to needs. 5. Develop process to produce the product features. 6. Tansfer process to operating forces.

Vital Few - all of whom are of great importance because of amount they buy or because of amount they contribute (surgeon bringing many pts).

Useful Many - large number of customers, each of whom is only of modest importance to organization (ex. patient, nurse).

How to determine customer needs? Ask. Customers needs are moving not static and require continous evaluation and prioritizaton.

CQI implies that an organization knows what needs to be improved.

benchmarking -- where one organizations operation is compared to that of another.

To gain the most from benchmarking it is best to go outside of the organization rather than compare departments. Can be within or outside of the particular industry...it's to compare processes. In healthcare more probable to compare within hospital itself

IOM - institute of medicine

AHRQ - agency for healthcare research and quality

standards evaluations and checklists contribute to resolution of the difficutly.

standards -- whatever the orgnanization determines them to be. Definition of standards begins with corporate mission; a reflection of the company goals.

standards must be reasonable, acheivable, and measurable.

JCAHO definition of performance measurement -- interrelated set of process and outcome measures that when used together provide a meaningful perforamnce profile of the orngaizaiton to which the measures are applied.

results standards -- efers to what is accomjplished

activity standards -- refer to the means by which something is accomplished.

evaluation -- process that determines to what degree the standard was or was not met.

checklists - for evaluating an incident reporting system, giving the RM valuable and comprehensive direction.

A checklist is not a complete description, but rather identifies many components of the process.

External Evaluations -- can be done by JCAHO, insurance companies, professional organizations, government entitites & legal groups.

JCAHO Evaluation - part of accrediting procedure. JCAHO requires organization to collect risk management data.

Risk, quality and safety groups are expected to share ifnormation toward improving quality.

Evaluation by insurers/underwriters -- primary role is to act as gatekeeper.

Underwriters concerned with -- credentialing, peer review, screeing systems, JCAHO complaince and internal evaluation mechanisms.

Underwriter can evaluate sound RM program by considering these program elements:
Commitment
Centralization and coordination, committee structure, quality assessment, medical staff invovlement, informed consent patient representaqtion, incident/accident re

1. Commitment: sr. management involvement.

2. Centralizaiton and coordination - designated individual responsble for program.

3. Committee structure -- issues identified, analyzed, resolved and monitored.

4. Quality Assessment -- QA and RM mutually supproing and reifnorming.

5. Medical Staff Involvement

6. Informed consnent - effective in reducing claim frequency.

7. Patient representation - handling of patient complaints.

8. Dispostion management/discharge planning - posthospital needs addressed (case management)

9. Incident/accident reporting - reporting system with ability to rend and respond to adverse trends.

10. Claims Management - policy & procedures to follow after serious incidnet occurs.

11. Biomedical serices/medical devises: test equipment prior to use, evaluate and remove defective equipment from service.

12. Contract review: RM involvement.

13. Educational programs - in RM.

Claims expereince one of the most critical elements an underwriter will evaluate.

At minimum RM should have the follwoing on every open & closed claim: 1. Date of Loss, 2. Closing date. 3. Evaluation of allegations. 4. Date of notice. 5. Nature of injury. 6. Who's involved;insurance coverage. 7. Reserve evalaution or final disposition.

Practice Guidelines -- a standard of care to which the practitioner will be held. Require continuous monitoring to ensure appropriate requirements, being used properly and reasonableness.

RM must be aware of departures from guidelines because of potential lability risk exposure.

Practice guidelines can potentitally reduce the number of malpractice cases and costs of settling those cliams.

Evaluation of malpractice claims is critical.

The hallmark of a specific RM issue is that it answers the queston "why would we pay money on this case?

High Risk areas - ob, surgicial anesthesia, ed. Radiology requires close monitoring by RM.

HIPPA - Health Insurance Portability and Accountability Act.

RM should monitor credentialing policies.

Process and outcome measures used in evaluating the effectiveness of RM programs and planning actions to enhance effectiveness.

Evaluation and planning includes: activities, process measures, outcome measures, action plans.

Process measures -- assess whether activites are being carried out as intended.

OUtcome measures assess whether progam is having impact designed to have.

examples: activity - set up written clames management policy; process senior mgmt devleops as a poslicy and reviewed at least annually; outcome - 75% or more claims are investigated within 24 hours.

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Failure to know and implement appropriate
Chain of Command can result in:

Bad patient care
Adverse patient outcomes
Medical malpractice suits
Loss of employment if inability to
appreciate and execute concept is ongoing
issue for practitioner

Risk should fit in with the mission, vision and strategy of the organization.

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