Industry Views

Healthcare Providers and Services

Key Issues for the Industry Currently Reflected in the Risk Selection

Workforce shortages combined with the loss of income caused by the COVID-19 pandemic have significantly impacted healthcare systems around the world. According to BMJ Global Health, a total of 152,888 infections and 1413 deaths were reported globally for healthcare workers; physicians accounted for just over half (51.4 percent) of the deaths. In addition, the industry was already facing a global shortage of 5.9 million nurses, and the pandemic caused additional turnover of 20 to 30 percent, according to some estimates.

As a strategy to mitigate talent risk, one healthcare provider, HCA Healthcare, acquired majority ownership of the Galen College of Nursing, one of the largest private nursing schools in the U.S. The overall industry also is focused on employee retention strategies to address issues such as burnout and fatigue. Risk to patients and overall quality are paramount in the industry.

Surprises in the Top 10 Risks Selected

The 2019 survey showed an emphasis on cyber, reputation and competition risk. In 2021 human capital emerged as the dominant risk, accounting for four of the top 10 risks. Workforce shortages in healthcare are well known, but the pandemic crisis accelerated the strain on employees. As healthcare systems work through waves of COVID-19 variants, human capital concerns remain front and center. To confront this risk, the industry will need to divert time, resources and funding to preserve and protect its workforce and offer benefit and reward programs that attract and retain talent.

In addition, organizations could benefit from definitive strategies to assist employees’ physical and emotional recovery from work by taking a risk management approach to the problem and developing a recovery management policy. They can systematically collect information on recovery as a hazard, analyze its risk and implement controls that will mitigate that risk. They can also establish a recovery-reporting system for employees that can convert subjective data into objective, actionable insights to inform decision making. When investigating accidents, companies can include recovery as part of the analysis to identify potential contributing or root-cause factors. And they can conduct recovery management training and education for employees and management, develop definitive plans for sleep-disorder management and other issues related to employee wellbeing, and conduct periodic audits that deliver corrective action through a continuous improvement model.

Most Underrated Risks

The most underrated risk in the industry is a failure to meet customer (patient) needs. The workforce shortage, pandemic crisis, absenteeism and a failure to attract and retain talent can all have serious implications for quality of care, patient safety and patient satisfaction. The strain being placed on employees is unprecedented, and the impact on quality of care cannot be overstated. A recent survey of healthcare workers in hospitals found that 26 percent are angry and 29 percent have considered leaving the medical field.

Talent-retention and recruitment strategies will be front and center for organizations, as will developing solid connections with nursing schools and medical schools to attract candidates. In addition, the growing use of travel nursing to fill employment gaps introduces other risks that have to be managed with demonstrably effective training, education and didactic learning to ensure high reliability of patient care.

Challenges the Industry Will Face in the Next 3 Years and What Organizations Can Do to Address Them

The Internet of Things (IoT) is an ever-growing challenge for the industry. With the advancement of telemedicine and related technologies for remote monitoring, home health, digital diagnostics and the like, organizations will need to focus extensively not only on cyber risk and controls but on operation and quality controls for the workplace of the future. Care models that have pivoted to virtual bring a whole new set of risks to organizations. Risk managers will need to hone their approaches to include vulnerability assessments of telemedicine platforms, telemedicine delivery models and patient-care outcomes. In addition, workforce shortages and their associated impact on patient care will continue to be a critical concern for the industry. Building recovery, burnout and resilience models will be a key component of risk plans for healthcare systems to ensure consistency of care, whether the care is delivered in person or through the internet (for example, via telemedicine or app-based programs).

How New Challenges Will Require Companies to Change Their Approaches to Risk Management and Mitigation

Risk management and mitigation strategies will have to be rapidly adapted to effectively manage both patient and employee safety and satisfaction in light of workforce shortages. Risk managers will need to expand their scope to include human resource and human capital risk to ensure that traditional risks (medical malpractice, workers’ compensation, general liability and so on) are effectively assessed. Staffing simulation exercises may be useful to understand the inherent risks associated with absenteeism, turnover and shortages. Shoring up risk management reach to ensure that risk professionals are involved early and often in mergers, acquisitions, employment gap strategies and establishing the environment of care will provide improvements in retained risk for the organization.

Current Top 10 Risks

Predicted Future Risks

By 2024

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