Create a 2–3-page internal memo for a risk-management team. Summarize a risk financing issue for a selected organization in the memo.
Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in a sequence.
Financial risk-management helps reduce the financial impact of risk. It also determines the best approach for handling adverse situations from a financial standpoint. Health care leaders must have a solid understanding of the basics of regulation, government and public risk sharing, and also the era of ACOs.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 2: Apply a risk-management model or framework to a specific risk-management priority.
- Identify key performance indicators and measures associated with a specific risk-management issue.
- Discuss strategies used to identify risk financing issues in a selected organization.
- Provide recommendations for risk financing options related to an identified financial risk issue.
- Competency 4: Analyze applicable legal and ethical institution-based values as they relate to quality assessment.
- Summarize the legal and ethical financial risk obligations of an accountable care organization.
- Competency 5: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration.
- Prepare a professional memo summarizing a risk financing issue for a specified organization.
Expert Solution Preview
As a member of the risk-management team, it is important to understand the financial risks associated with the healthcare industry. This memo will provide an overview of a risk financing issue for a selected organization and offer recommendations for risk financing options.
To: Risk-Management Team
Subject: Risk Financing Issue for ABC Hospital
ABC Hospital has been experiencing financial difficulties in recent years. One of the main reasons for this is the increasing cost of medical malpractice insurance. Medical malpractice lawsuits can result in significant financial losses for the hospital, which underscores the need for effective risk financing strategies.
Key Performance Indicators:
The key performance indicators associated with this risk financing issue include the hospital’s current premium rates and its loss experience. These indicators can help assess the financial impact of medical malpractice lawsuits on the hospital’s budget.
Strategies for Identifying Risk Financing Issues:
There are several strategies that can be used to identify risk financing issues in healthcare organizations. These include analyzing loss history, evaluating healthcare trends, and conducting risk assessments. These strategies can help to identify potential risks and develop effective financing strategies.
Recommendations for Risk Financing Options:
To combat the increasing cost of medical malpractice insurance, the hospital should consider alternative risk financing options such as captive insurance, risk retention groups, and self-insurance. These options can help to reduce the cost of insurance and increase the hospital’s control over its risk financing.
Legal and Ethical Obligations:
As an accountable care organization, ABC Hospital has a legal and ethical obligation to provide quality care to patients while also maintaining financial stability. This requires effective risk management practices and a commitment to ethical behavior.
ABC Hospital’s financial risk issue with regards to medical malpractice insurance underscores the need for effective risk financing options. By identifying key performance indicators and measures, developing strategies for identifying risk financing issues, and providing recommendations for financing options, the hospital can better manage its financial risks and maintain quality patient care.