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WHAT IS RISK MANAGEMENT? Risk management is the business of reducing the likelihood of errors through a pro­ cess of identification, assessment, and prioritization of risks, followed by coordinated and eco­ nom­ ical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risk can come from vari­ ous sources, such as unpredictability in financial markets; threats from failures (at any phase in design, development, production , or sustainment life cycles); ­ legal liabilities; accidents; or events of uncertain root causes. See definition from The Institute of Risk Management (1). Strategies to manage threats (uncertainties with negative consequences) typically include avoiding the threat, reducing the negative effect or probability of the threat, transferring all or part of the threat to another party, and even retaining some or all of the potential or ­ actual consequences of a par­ tic­ u­ lar threat. The majority of risk management–­ related activities in health care aim to reduce medical errors and adverse effects that are costly in terms of damage, discomfort, disability, or distress to an individual and also result in financial loss to an organ­ ization. Risk management as a business strategy has existed for about 50 years (2–4). Health care risk management in its pres­ ent form emerged from the malpractice crisis of the mid-1970s, when physicians, hospitals, and other health care entities experienced rapid rises in claims costs and subsequent escalations in insurance premiums. The crisis contributed to the rapid departure of several major medical professional liability insurers from the market (5–8), but also led to the first risk management programs. The American Society for Healthcare Risk Management (ASHRM, formerly the American Society for Hospital Risk Management) was established in 1980 in response to the developing interest in risk management among health care organ­ izations. Medical risk management activities include pro­ cesses to manage loss by detecting , reporting, and correcting ­ actual or potential deficiencies in care and operations that could lead to costly ­ mistakes. Programs involve all aspects of work, production, and interactions within clinical and other health care settings. One of the dimensions of a risk management program is to strive for care that is ­ free of iatrogenicity including medical errors, medical malpractice, adverse effect, and harm. A health care organ­ ization’s risk management team is responsible for organ­ izing, coordinating, and CHAPTER 3 Risk Management The Medical Center Administration Perspective Stephen K. Jones and Miriam A. Gonzalez-­ Siegel The Importance of Disclosure / 23 from getting worse, but such be­ hav­ ior only compounds risk, erodes trust, and conflicts with the patient safety movement. THE IMPORTANCE OF DISCLOSURE In its current state, risk management is both rule based and art, a balance of regulations that guide the delivery of care and operations, and regulations that ­ favor documentation, transparency, and completion of incident reports—­ a system directed at improving patient safety. Risk management operates in an environment in which consumers of health care are aware of system malfunctions and ­ human errors. This understanding is predicated on the need of patients to understand what occurred when care goes wrong and, more importantly, to feel that such events are not in vain. Patients seek assurance that their exposure to harm and suffering has value in improving the quality and safety of care. This assurance, supported by compassionate communication , helps heal the provider-­ patient relationship , de-­ escalates the adversarial relationship, and eliminates both the perception that facts are being concealed and the defensiveness that commonly surrounds iatrogenicity. Disclosure is one of the most valuable risk management strategies and the topic of much research. The early Harvard Medical Malpractice Study (10–11) illustrated that the failure to disclose was a strong contributing ­ factor in patients filing lawsuits. Patients’ perceptions postevent­ were that they ­ were not told about the event, their questions ­ were not addressed, and providers ­ were withholding information. ­ After iatrogenic events, risk management plays a pivotal role in facilitating and repairing relationships and reestablishing confidence by guiding and supporting clinicians and their communications with patients and families. Medicine has never been error-­ free. Physicians understand their responsibility to reduce the rate of medical errors, show re­ spect to patients and their rights, and to maintain trust. Physicians and providers recognize their ethical duty when error is committed. Disclosure, the moment in the patient-­ provider relationship that is both experiential and educational, must be carry­ ing out programs to control the clinical risks associated with patient care ser­ vices. THE...


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