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Willis Towers Watson's Dave Kennedy looks at how to navigate the healthcare sector
Specific challenges include use of technology, regulations and demographic trends, according to Dave Kennedy of Willis Towers Watson.
The healthcare industry is continually having to reassess its risk landscape. This is driven by many factors, including new technologies such as electronic medical records; increasing patient litigation; and changing demographics such as an ageing population. At the same time, the industry must also manage traditional risks including malpractice claims, general liability, reputational issues and other diverse liabilities.
The result is a very complex sector, which is hugely sensitive to social and political influence and the change agenda, whilst also having to manage day to day activity in an environment of significant financial pressures. Specific challenges include greater use of technology and remote working; regulations such as duty of candour, medical staff credentialing and patient care pathways; and structural trends including demographics and the industry's ability to cope with demand.
There is therefore a greater need for healthcare professionals, led by risk managers, to support the integration of risk management in a way that acknowledges the complex risk profile and better enables effective risk mitigation and management. The more sophisticated risk managers will also be assessing the behavioural influences of people risk (such as human error in cyber - for example the use of USB sticks, or password malfunctions) to compliment the more traditional focus of the I.T. department.
Engaging the c-suite
The elevation of the risk management agenda into the boardroom is a trend that is expected to continue, and this is also true in healthcare. Boards of directors have a fiduciary duty to protect the organisation's assets and interests on behalf of shareholders, patients, donors and the community.
CEO and c-suite engagement in defining the risk strategy and levels of acceptable risk enables more cost-effective management of risk exposures that is better aligned with the business needs of the organisation. Regular communication between the c-suite and those held specifically accountable for managing those risks provides a rich level of awareness of current risks affecting their organisation.
Innovation - risk and opportunity
Increasingly, the healthcare system is looking at what they do from the patient perspective. Greater promotion and awareness of wellbeing means that patients are taking more care of their own health. Rapid innovations and new technologies designed to facilitate this - such as increased use of smartphone apps, remote care, employee benefits to promote health - bring significant operational efficiencies but, at the same time, create emerging risks such as cyber threats, disruption from new competitors and a new raft of regulation and legislative compliance.
So how can these risks be mitigated? The UK healthcare sector must recognise that risk management is a crucial component of the industry supply chain. For example, our own healthcare experts at Willis Towers Watson are seeing an increasing awareness of the importance of clinical risk management programmes.
Healthcare risk managers (and specialist brokers and underwriters) must stay up to date on relevant information including the use of clinical data. The outcomes of clinical data research can often be unpredictable which can create additional risks such as reputational or brand risks if a particular treatment has unintended consequences. As a result the risk management of pharmaceutical and healthcare organisations needs to consider reputational risk as well as clinical.
Comprehensive risk management across the healthcare sector, covering patient care and emerging risk, can not only promote patient safety but ultimately help to improve patient outcomes. And this is something we can all welcome.
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