How to Assess Organizational Risk in Healthcare

Healthcare organizational risk assessments are critical for every organization. They allow organization leaders to evaluate risks that inevitably exist across their ecosystem, protecting patients and staff while minimizing financial, legal, and other types of liabilities.

Today, risk assessments have a wide scope that involve assessing different facets of the organization and leveraging data insights to analyze risk and develop mitigation plans. In this guide, we’ll cover everything you need to know about how to start the process and execute it effectively.

In the sections that follow, we’ll cover everything from key areas of focus for your risk assessment, to a step-by-step implementation guide, to insights on how master data management (MDM) can power your efforts at every stage.

Key Takeaways:

• One in ten patients are harmed while receiving medical care each year. Many of these incidents are preventable.
• Data breaches are on the rise in healthcare. Risk assessments should identify vulnerabilities in data security strategies.
• Other key focus areas for healthcare organizational risk assessments include: legal compliance, financial risk, emergency preparedness, technology, and workplace safety.
• Risk assessments are best executed with a diverse, multi-disciplinary team and using detailed, documented mitigation plans.
• Master data management (MDM) centralizes critical data used in the risk assessment process, making it easier to collect, analyze, and share as needed.

What Is a Healthcare Organizational Risk Assessment?

A healthcare organizational risk assessment is a systematic, comprehensive evaluation of potential risks and vulnerabilities existing across a healthcare organization. This critical process aims to identify, analyze, and mitigate risk to ensure patient and staff safety, and to minimize financial and legal liabilities.

Performing periodic risk assessments empowers healthcare institutions to establish frameworks around which they can set safety and operational standards. 

Further, it provides insights that inform continuous improvement measures, allowing organizations to identify gaps and vulnerabilities, take steps to eliminate them, and implement preventative strategies on an ongoing basis.

Important focus areas covered by healthcare organizational risk assessments include:

Clinical Care and Patient Safety

The top priority for every healthcare organizational risk assessment should be patient safety. Despite the levels of technology and safety standards in place today at hospitals and healthcare facilities, the World Health reports that 1 in 10 patients are harmed while receiving hospital care every year, and that 11,000 avoidable patient deaths occur annually.

Unsafe care is responsible for 15% of all healthcare costs and is a top 10 cause of death globally.

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Patient safety risks can include diagnostic and medical care errors, infection control, surgical safety, falls, provider communication errors, patient identification errors, and more. Healthcare organizational risk assessments aim to identify where this type of risk exists at the organization, then work to mitigate it as quickly and effectively as possible.

Data Security and Regulatory Compliance

With the increasing reliance on electronic health records (EHRs) and sensitivity of patient information, data security and privacy are paramount. Risk assessments in this area evaluate safeguards against data breaches and unauthorized access to patient records.

This part of the assessment is crucial. According to The HIPAA Journal, the number of large healthcare data breaches (500+ records) that occur in the United States each year has steadily increased over the past decade, and surpassed 700 in both 2021 and 2022 (and is on track to do the same in 2023).

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Compliance with healthcare data protection regulations should be rigorously examined in every risk assessment. 

Risk assessments should also evaluate adherence to healthcare regulations, accreditation requirements, and governmental standards. The goal is to identify potential compliance gaps and proactively address them in order to prevent legal and financial repercussions. Compliance risk management is essential for maintaining your organization’s reputation and credibility within the healthcare industry.

Financial Risks

Financial stability is vital for healthcare organizations. Risk assessments in this area address potential vulnerabilities in revenue cycle management that can impact your organization’s sustainability, including billing and coding accuracy to prevent financial losses due to errors.

Risk assessments also examine insurance claims processing to ensure timely reimbursements and lower the risk of financial fraud.

Emergency Preparedness and Disaster Management

Operating healthcare facilities are absolutely essential during emergencies and disasters. In order to stay prepared, your healthcare organizational risk assessments must evaluate readiness to respond to events such as natural disasters, acts of violence, pandemics, cyberattacks, and other types of crises.

This involves evaluating emergency response plans, resource availability, and staff training to ensure the continuity of healthcare services during adverse events These should be developed with the most likely emergency and disaster events in mind, depending on your location and type of organization (ex: coastal locations require hurricane preparedness, while flatland locations may need tornado readiness plans).

Technology and Infrastructure

Technology is no longer simply a support tool for healthcare organizations—it’s a foundational part of the way they function and communicate. As such, your risk assessments should include an evaluation of your IT infrastructure, software systems, electronic medical equipment, and dependencies across this network of resources.

Aim to identify potential weaknesses and security vulnerabilities that could disrupt your operations and ability to provide care, or compromise patient information and safety. Put measures in place to monitor IT performance to quickly recognize any significant changes or technical issues.

Workplace Safety

Healthcare professionals are exposed to elevated workplace safety risks due to the nature of their jobs. They’re exposed to communicable diseases and infections, perform complex procedures, and are often required to handle ergonomic tasks that can cause physical strain or injury.

Just as healthcare organizational risk assessments are attuned to patient safety, they must prioritize worker safety in similar ways to protect staff and maintain a high quality of patient care.

Performing an Effective Healthcare Organizational Risk Assessment: A Step-by-Step Guide

Now that we know what a healthcare organizational risk assessment entails and its areas of focus, let’s walk through the steps to conducting your assessment effectively.

1. Form a Dedicated Team

Assemble a cross-functional team of experts from your organization, including representatives from areas such as clinical care, IT, compliance, and administration to lead the risk assessment. Ensure diverse perspectives to more comprehensively evaluate risks.

2. Define Objectives and Scope

Clearly state the assessment’s goals, boundaries, and the specific areas you intend to evaluate. This provides a roadmap for the assessment process. Use frameworks like SMART goals to ensure goals are specific enough, quantifiably measurable, and bound by specific deadlines and timeframes.

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3. Identify Assets and Data

Identify and catalog all critical assets at your organization relevant to your risk assessment, including technology assets, patient data, facilities, equipment, human resources, and essential processes within the organization. Knowing what you need to protect is fundamental to risk assessment.

4. Risk Identification

Systematically work through each area of your assessment to pinpoint potential risks across various domains. For this step, you’ll need to establish which methods are best for assessment. Commonly used methods include: direct observation, data reviews, surveys, and algorithmic risk assessment tools.

5. Analyze Data to Measure Risk

Analyze the data you collect through your assessment methods, and evaluate existing risks based on their likelihood and potential impact. Then, you can prioritize risk mitigation strategies and allocate your resources accordingly. When possible, aim to identify the root cause of risks so that you can optimize mitigation strategies and prevent recurrence in the future.

6. Mitigation Strategies

Work collaboratively as a team to develop actionable mitigation strategies for each identified risk. Be sure to specify who is responsible for each task and set clear timelines for implementation. Document all mitigation plans to maintain clear communication and accountability throughout the process.

7. Compliance Review

As you assess and review the various parts of your organization, assess the organization’s adherence to healthcare regulations and standards, identifying compliance risks. Develop strategies to address these risks quickly and efficiently.

8. Emergency Preparedness

Evaluate your organization’s readiness to respond to emergencies like natural disasters or cyberattacks. Ensure you have detailed emergency response plans in place, resources are available, and staff is trained to act expeditiously in the event of an actual emergency.

9. Continuous Monitoring and Improvement

Continuously review and update the risk assessment to adapt to evolving risks and changes within the organization. Monitor the effectiveness of your mitigation strategies, and make adjustments as needed for optimal ongoing risk management.

How Master Data Management Lowers Organizational Risk

The sheer scope of a modern healthcare organizational risk assessment can be daunting. It requires vast amounts of data and the right tools and technologies to support its collection and analysis.

To keep data centralized in a single repository, easily share it with key stakeholders, and systematically collect and analyze it for assessment, healthcare organizations need master data management (MDM) tools in their arsenals.

Master data refers to a set of core, standardized data elements that provide a clear and consistent view of critical information within an organization. In healthcare, this typically includes patient data, provider information, medical codes, facility details, and more. 

When this data is managed intentionally and effectively, it also reduces risk long-term by enhancing:

• Data Integrity: MDM ensures the reliability of information used in risk assessments and other important organizational initiatives
• Patient Safety: Important information like patient medical histories, allergies, medications, and personal care requirements are always updated and available
• Regulatory Compliance: Master data makes compliance-related tracking and reporting easier, centralizing important data and keeping it secure
• Financial Risk Management: Accurate financial master data sets a foundation for assessing financial risks (like billing errors or fraud) and reducing their occurrence.
• Operational Efficiency: Well-managed master data streamlines processes and improves operational efficiency. It ensures that information is consistent across different departments and systems, reducing errors and redundancy.
• Data Security: Master data management contributes to data security by classifying data elements based on their sensitivity and access controls, reducing the risk of data breaches or unauthorized access.
• Vendor and Supplier Management: Supplier and vendor master data supports the assessment of supply chain risks, ensuring the reliability of critical medical supplies and equipment sources.
• Analytics and Reporting: High-quality Master Data facilitates advanced data analytics and reporting, allowing healthcare organizations to identify patterns, trends, and potential risks more effectively.

Gaine’s Coperer platform is designed specifically for multi-faceted healthcare organizations, providing ecosystem-wide MDM capabilities that solve the pervasive “single course of truth challenge” and power smarter ongoing risk management.

Schedule time to talk to one of our MDM experts and learn how we can help you transform.