Enterprise Risk Management (ERM) began as an effort to integrate the historically disparate “silos” of risk management in organizations. Many organizations recognize the need for ERM and many have programs in place. But, as organizations proceed with implementing one of the many varieties of ERM on offer, persistent questions keep arising. How to handle the “upside”—positive opportunities—in addition to negative risks? How to link ERM to strategic planning and corporate development efforts? How can we be assured that the risk management being put in place will actually work?
In healthcare, these questions are joined by another daunting array. How do we apply ERM principles to the many risk programs competing for funding and head count, be they employee safety programs, clinical risk, governmental mandates, patient safety and quality, and so on? How do we integrate ERM into how we actually manage and run the organization? And how should we respond to ever-evolving healthcare reform and policy? The challenges in healthcare are further compounded by changing demographics (aging population, increasing metabolic syndrome) so getting one’s arms around all the risk and uncertainty seems a Herculean task.
Stanford Hospital and Clinics Risk Consulting and Strategic Decisions Group have been working to apply tested and proven risk management methodology to healthcare. “Value-Driven ERM” is distinguished from existing risk management tools (such as heat maps and risk registers) by its ability to capture systemic, correlated, and value-creation reisks on the same basis as value protection risks.
Access the paper, “Value Driven ERM: Making ERM an Engine for Simultaneous Value Creation and Value Protection,” a publication of the American Society for Healthcare Risk Management.