I'm certain that different fields all have their own version of risk management. Personally, I only have experience with risk management in the realm of medicine. Until March of this year, I was employed by a medical malpractice insurance company here in Michigan that insures over fifty hospitals in Michigan and Ohio as well as hundreds of individual physicians and practices. In my time there, I learned a thing or two about risk management in healthcare.

The role of risk management in medicine is extremely important because millions of dollars and the lives of patients ride upon it. Within an insurance company, the mission of risk management is basically twofold:

  • Educate physicians in the details of various laws and regulations affecting their practice. Such laws regularly at issue include the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Emergency Medical Transfer and Active Labor Act (EMTALA), and infant abandonment.
  • Guide physicians in steps to be taken following a violation of any of the above regulations that could lead to or has led to a malpractice suit. Then, show them how to not let the same thing happen twice.

In order to accomplish these two objectives, the company I worked for offered lots of services to insureds. We held regular educational programs designed for healthcare professionals to make regulations and requirements more clear and easy to understand. We annually assessed hospitals for conformity to the requirements laid out for hospitals with regard to credentialing, documentation, and safety. Mass emails were sent any time a new law was passed, outlining how it would affect the healthcare industry. We would write policies and procedures for hospitals. A 24-hour legal help line was created so that a doctor could get advice at any time of the day if they had an occurrence. We provided written material such as articles, samples of required forms, and even full educational programs (script included) so that any hospital employee who could read could teach a workshop on occurrance reporting or informed consent.

Within a hospital, the role of the risk management department is similar, but on a local level. Basically, the insurance company assists the hospital risk manager who in turn assists their administrators and physicians.

The problem with risk management, although it is extremely helpful, is that it is viewed as a financial drain. Most of the services offered by the company I worked for were provided free of charge. When we tried to attach fees to some things, the docs got hot and bothered. While the implementation of a successful risk management program decreases the amount of money paid out in malpractice suits, its up-front cost can be tremendous. Therefore, it is often a lower priority, especially in smaller, more rural hospitals.