Executive Briefing: Hospital Risk Management: The Second Decade

Abstract

Risk management is defined as the systematic process of identifying, evaluating and addressing potential and actual risk. Although introduced to the hospital industry nearly a decade ago, its status in Canadian hospitals remains uncertain, a position that is in sharp contrast to the American situation. Chiefly as a result of the medical malpractice crisis and associated circumstances in the mid-1970s, risk management has emerged as an integral element in the operational activities of American hospitals. The process is a mechanism for self-protection in co-operative, self-insurance arrangements and to secure commercial premium adjustments.

Many trends have been recognized in Canada that would suggest a predisposition toward the proliferation of risk management programs. These indicators include an increase in the number and size of claims against hospitals and physicians, a reduction in the availability of commercial health care insurance, and an increase in alternative insurance arrangements.

Despite these indicators, movement toward risk management by Canadian hospitals has been minimal. A prime reason appears to be lack of financial incentives to stimulate the development of risk management programs. There is also an absence of specific accreditation standards pertaining to such programs.

The case in support of risk management for Canadian hospitals continues to grow. The basic assumptions associated with a program are board, medical and staff support; a concerted effort to recognize and reduce potentially litigious situations and occurrences; and an ability to adapt. The initial steps to develop a risk management program include assessing current risk control activities and implementing structural elements. As well, a program must address its relationship to Quality Assurance activities in the hospital.