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The emergence of health care risk management.

THE COMPLEXITY AND INTERRElatedness of many functions in health care have helped redefine the risk manager's role. Consequently, one individual's title and job responsibilities at a large teaching hospital in New York City may have expanded over several years from "risk manager" to "vice president for risk management, regulatory affairs, quality assurance and utilization review." Combining these interrelated functions under centralized leadership is done with increasing frequency to improve coordination and reduce redundancy. Many health care risk managers enter the field from health care backgrounds, particularly nursing, adding knowledge of insurance and law through on-the-job experience, seminars and course work.

Today, health care risk management (HRM) is becoming recognized as an integral part of a total management strategy, essential to meeting the strategic goals of each health care system. Moving beyond the traditional insurance and liability concepts of risk management, HRM provides health care leaders with a new perspective on the health care environment.

HRM strives to optimize clinical and administrative resources through systems that promote synergy and growth, minimize the risk of liability, and maximize the value of insurance dollars spent. Much more than individual products or services, HRM is a process and a function that pervades the organization. Through high-level administrative decisionmaking and integrated hospitalphysician strategies, HRM addresses all aspects of health care risk so that the bottom line and the quality of care are both positively influenced. In today's environment of changing health care delivery patterns, expanding technology and critical service selection decisions, the coming of age of HRM is timely.

HRM began as a response to the medical malpractice crisis of the late 1970s. HRM quickly gained a measure of credibility in the mid-1980s with the widespread acceptance of corporate liability and other legal theories that made the hospital the "deep pocket" for plaintiffs. This placed hospital risk management in a defensive position - even while it was presumably preventing losses and decreasing risk exposure.

In 1980, the American Society for Healthcare Risk Management (ASHRM) was organized as a division of the American Hospital Association (AHA). During the late 1980s, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) established its first standards for the loss control and prevention components of risk management programs. The Joint Commission has not developed standards for risk financing, which falls outside the Joint Commission's focus on factors that directly affect health care safety and quality; standards for clinical services, quality management, plant safety and many other areas have existed for years.

The 1990s find health care in a struggle to endure the tumultuous environment of health care delivery that seems destined to persist. Therefore, HRM can help ensure organizational quality and effectiveness, medical-administrative cooperation and the well-thought-out strategic plans that are important links to the health care institution's future success.

Barbara Challan is associate director, risk management, for FOJP Service Corp, in New York, NY.
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Publication:Risk Management
Date:Sep 1, 1992
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