Posted on: January 25, 2024

Tips for Medical Practice Risk Management

Australians think of medical providers as their front-line defence for health issues, but who’s helping those healthcare practices to stay ‘healthy’?

This article is a guide on sector-specific risk management to help protect your business.

Healthcare practices’ risk factors to consider

Common risks for medical practices include:

  • Compliance with the standards of the Royal Australian College of General Practitioners, which aim to improve services’ quality and safety to protect patients from harm. They’re a great resource to identify and deal with gaps in your systems and processes. Your state may have a clinical governance framework, such as in Victoria.
  • Security, privacy, and data management – not just patient information, but that of your staff, suppliers, and other customers. The Office of The Australian Information Commissioner (OAIC) offers factsheets about patients’ rights to their health information. The OAIC also sets out responsibilities about notifiable data breaches
  • Worker safety, including ergonomic, burn out, biological, chemical, medical equipment, occupational violence/bullying/harassment, fatigue, etc
  • Workplace health and safety, such as slips, trips and falls, infection control, etc.

A newer risk involves the use of generative artificial intelligence (AI), such as ChatGPT, in your processes (and maybe even diagnoses). This open-source article, published recently in the Journal of Medical Internet Research, describes the technology as a double-edged sword.

The research shows AI has promise as a tool for medical documentation as a language assistant or offering timesaving templates, such as for patient clinic letters, radiology reports, medical notes and discharge summaries. Risks include false information, and not being up to date with medical developments, so human judgement is a key to ensuring quality.

In reviewing your risk management matrix, check it spans physical, regulatory, psychosocial, ethical, technological, operational, clinical, legal, staffing, business continuity, and workforce issues. Another major risk is financial – inflation, economic uncertainty, insider or external fraud, and patients getting into arrears.

Strategies to reduce risk

Safe Work Australia has a guide to identifying hazards and managing the related risks in the medical/healthcare sector.

It lists a three-tiered approach that aims to:

1. Eliminate risks, but if this is not possible

2. Be reasonably practical in minimising them

3. Use administrative control measures.

Your options at that point are to provide training on safe working practices and scheduling workers’ shifts to reduce fatigue, for example.

It’s also important to focus on minimising financial risks. Check your risk management plans for how they can deal with issues such as medical errors, compliance breaches, reimbursement levels, malpractice claims, medical errors, and insurance claims. Each of those will impact finances whether the allegation is upheld or not.

Ensure you factor in the risk multiplier effect. Risk multipliers encourage you to widen your vista to the links between risks. Examples of these indirect risks include the COVID-19 pandemic, the Russian-Ukraine War, and the Israel-Palestine conflict.

The 2023 BDO Global Risk Landscape Report explores the concept of risk multipliers and how businesses can shift to a risk-multiplier mindset. That helps identify and minimise risks before they become ‘existential’ threats.

And while you’re scoping possibilities, consider KMPG Australia’s future trends, predictions and opportunities for the healthcare system.

Benefits of effective risk management for healthcare

Developing, adopting, and implementing transparent and methodical risk management plans can cut the costs of hazards and risks to your health practice. That’s according to a World Hospital Health Services’ study.

Other benefits to your medical practice include:

  • Improved efficiency and efficacy
  • Enhanced reputation
  • Better compliance.

Types of insurance medical practices need

A key part of your risk management approach is to invest in insurance tailored to your unique healthcare practice circumstances. Typically, you should consider:

  • Workers’ compensation – compulsory if you have staff
  • Professional indemnity to cover you, your partners, and staff if they’re sued or a claim lodged against them individually for breaches of confidentiality, civil liabilities, or negligence, for example
  • Medical malpractice insurance to cover health professionals and the practice related to a patient suing the business for acts, errors or omissions in connection with the treatment
  • Business or office insurance to protect the building and/or contents from fire, theft, water, and property damage, etc.
  • Cyber insurance to give you peace of mind should your business suffer a cyber attack.

Talk to us to help you review your policy coverage to ensure it reflects your current operations and offerings. Protect your practice with our guidance.

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