Risk Management Issue

Topics: Risk, Risk management, Operational risk Pages: 12 (4500 words) Published: November 7, 2005
Risk management is the most important part of any organization to face the risks that might arise when a new project started. It should be a first concern when the decision is being made. Risk management is the practice of looking at the exposure to risk and deciding how to best handle that exposure. The idea behind risk management is to decide if the benefit outweighs the risk. This process will help you to identify risks that might normally be overlooked so when things come up, they do not surprise you by having a plan in place on how to solve them. Risk management would help to identify and then manage threats that could severely impact or bring down the organization. This could be done by reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence, and then taking appropriate actions to address the most likely threats (McNamara, C., 1999). Risk management also explores strategies to assess organization's susceptibility to risk. It minimizes adverse impacts of operational risk, market risk, and credit risk on resources, earnings, and cash flows through risk analysis. Organizations should regularly undertake comprehensive, focused assessment of potential risks to the organization. This focused assessment should occur at least twice a year by a team of staff members representing all the major functions of the organization. The assessment should be carefully planned, documented and methodically carried out. Healthcare organizations and facilities are among these organizations, which could benefit from well-implemented risk management.

Healthcare organizations are among those organizations that face many risks associated with their operations. Long-term care (LTC) facilities are one of them. The long-term care industry is in a state of crisis across the nation. An alarming number of states are experiencing dramatic increases for general liability and professional liability (GL/PL) coverage. A recent study, commissioned by the American Health Care Association, found that 14 of the 16 states analyzed experienced double-digit annual increases in their GL/PL costs over the past decade, with a majority of them experiencing loss cost trends in excess of 25 percent (Bourdon, T., 2005). LTC facilities are facing broad-range risks such as reducing medical errors, patients' safety, complying with government program like HIPAA, staying on top of developing legislation and regulations and making them work to facility's benefit. The major management risks the LTC facilities are based in respecting and protecting elders. According to the United States Census Bureau's projections on aging, more than 40 million U.S. citizens will be of retirement age by 2010, including approximately 6.1 million who will be 85 years old or older. It was projected by the government that some 86.7 million Americans will be 65 and above and 20.9 million will be 85 or older by 2050 (Cheese man, 2001). Many of these people will enter eldercare facilities, extended care facilities, and independent living facilities. As the U.S. population ages, and more people reside in long-term-care facilities, security professionals must learn to assess and address the unique risks of these facilities. There are many types of long-term care facilities such as independent living or congregant care, assisted living, sub-acute nursing, acute care, and finally hospice. It is often that these care options are provided by a single organization on a single campus. Whether the LTC facility offers some or all of these care options, the first step in developing appropriate security is a thought risk assessment. The key is for management to act proactively. They should not wait for an incident to occur before conducting an assessment. The administrators of these facilities are beginning to place the proper priority on security. Each long-term care facility has its own unique security needs depending on its...

References: Bourdon, T. W. (2005, April). Long-term care continues to experience the worst liability
cost increases in health care. Retrieved June 26, 2005, from
Boxerbaum, E. A., Donaldson, P. (2005, May). Respecting and protecting elders.
Healthcare, p. 47-48.
Cheeseman, J (2001). National Population Projections. Retrieved June 27, 2005, from,
McNamara, C. (1999). Basic Considerations in Risk Management. Retrieved June 25,
2005, from http://www.mapnp.org/library/legal/rskmgmnt.htm
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