With the Affordable Care Act (ACA) continuing its implementation this week with the start of the open enrollment period, there has never been a more critical time for Healthcare Institutions to have a firm handle on their risk environment and the implications of those risks.
Since its enactment in 2010, the ACA has fundamentally shifted how many hospitals must conduct day-to-day operations. For example, hospitals must now shift their patient records systems to electronic medical records, which introduce a host of IT and data security risks. The ACA also emphasizes Value-Based Purchasing, resulting in a new hospital payment system based not just on volume of service but on key metrics, such as the rates of Hospital Acquired Conditions (HACs) and Readmission.
To maximize efficiency, hospitals are introducing a host of new policies and procedures designed to ensure compliance and maximize quality of care. In this period of significant change and experimentation, hospitals face significant challenges to track the relationships between new programs, new mandates, and new risk, while also tracking the key healthcare metrics that indicate the effectiveness of each initiative.
One method of tackling this problem is with a formalized Taxonomy. In a healthcare organization’s taxonomy, both clinical and operational risk can be tied to the regulations they impact, whether that’s the evolving impact of the ACA or more mature regulations such as HIPAA and JCAHO.
When the time comes to address emerging risks with internal controls, a Taxonomy allows hospitals to identify systemic risks that can be addressed with enterprise wide policies rather than point solutions, allowing hospitals to operate with the efficiency that’s now even more critical to their business. Besides risks, key business metrics and risk indicators (KRIs) should be related to the organizational goals they support, allowing organizations to focus resources on the initiatives that provide the greatest potential for improvement in patient care or efficiency of operations.
More and more hospitals are turning to enterprise risk management to create the efficiencies needed in today’s healthcare environment. A mature enterprise risk management framework will not only reveal the dependencies that can streamline operations, but will provide your leadership with formalized reports that demonstrate the true value of your ERM program for both your organization and the patients it serves.
Interested in the key aspects of an ERM Framework that can help your hospital operate more efficiently? Download our eBook, “5 Key Principles for an Actionable ERM Framework.”