Internal Memo for a Risk-Management Team
Risk Financing Issue
Risk financing is the reduction of the financial impact of a risk, as well as determining the best approach from a business standpoint to handling adverse situations. Financing potential malpractice suits at a medical clinic is a financing risk issue in the health care sector. Medical malpractice usually occurs when a health care professional neglects to provide appropriate treatment, fails intentionally to take appropriate action, or offer poor treatment that causes harm or death to the patient (Brazier, 2017). It could result from medical errors such as misdiagnosis and wrong prescription of drugs. Medical malpractice is against the law, and there have been several medical malpractice suits against doctors. Medical malpractice is a financing risk issue that affects nearly all healthcare sectors today. Kaiser Permanente is a healthcare organization that offers health care services and work to improve the health of its member and the community at large (Kaiser Permanente). Medical malpractice suits are also a financing risk issue in Kaiser Permanente.
How to Identify and Manage Risk Financing Issues
Risk identification is the first and the most crucial step in risk management of risk financing issues that may occur in Kaiser Permanente organization. Initial and on-going risk identification serves as the process of finding risk. To identify risk financial issues, several steps should be taken. Conducting a brainstorming session and performing SWOT analysis may serve as the methods for identifying financial risk issues (Dinu, 2017). Doing brainstorming sessions with other executives in Kaiser Permanente organization would help generate a list of all possible risk financing issues in the organization. Potential risks financing issues would then be analyzed and stated based on increasing probability of occurrence. Performing SWOT analysis is also a method that can be used to identify risk financial issues in Kaiser Permanente. More focus should be given to the analysis weaknesses and threats of the organization, which then the financing risks issues can be deduced. Managing risks financial problems can also be facilitated through several processes, which aim at mitigating and preventing hazards in the organization. Investing in a robust risk management information system is a strategy that can be applied in managing risks in the organization. These systems provide tools for documenting incidents, tracking threats, reporting trends, and even benchmarking data points (Catalyst, 2018). The organization can produce reports for losses and incidents. The system dramatically enhances risk management by improving performance through an available and reliable operation. The organization can also find the right balance of risk financing, which may either be risk transfer or retention. Risk transfer is usually facilitated through insurance policies, while risk retention includes self-insurance and captive insurance. The organization may consider making insurance cover to transfer risks in times of occurrence.
Options for risk financing of medical malpractice suits in Keisar Permanente may include transfer or retention (Catalyst, 2018). The organization can fund the loss that accrues from medical malpractice lawsuits against the organization through risk transfer or retention. Risk transfer is often done through insurance policies. This means that the organization should have an insurance policy that would take the burden of funding the financial issue on behalf of the company. Besides, risk retentions is often a scenario where the organization supports itself in case of a risk. The risk-retention option needs the organization to inure itself and put aside some resources for risk financing the issue.
References
Brazier, Y. (2017). Medical Malpractice: What does it Involve? Health News-Medical News Today. Available at https://www.medicalnewstoday.com/articles/248175
Catalyst, N. E. J. M. (2018). What Is Risk Management in Healthcare? NEJM Catalyst. Available at https://catalyst.nejm.org/doi/full/10.1056/CAT.18.0197?share=email&nb=1
Dinu, A. M (2017). Modern Methods in Risk Identification in Risk Management. International Journal of Academic Research in Economics and Management Sciences, 1(6), 67
Kaiser Permanente (2020): Kaiser Permanente Washington. Available at https://wa.kaiserpermanente.org/