Assessment 2 Risk Financing Instructions: Create a 2-3 page internal memo for a risk management team. Summarize the risk management issue you identified in

Assessment 2
Risk Financing

Instructions: Create a 2-3 page internal memo for a risk management team. Summarize the risk management issue you identified in Assessment 1 for your selected organization in the memo.

Introduction:

Note: The assessments in this course build upon each other, so you are required to complete them in 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. Healthcare leaders must have a solid understanding of the basics of regulation, government and public risk sharing, and also the era of ACOs.

There is a constant tension between the management of medical errors and the improvement of the quality of care. You may be asked to participate in risk management and risk financing activities in your role as a healthcare leader.

If a risk management team asked you to research and summarize financial risks in your organization today, would you know the following?

• What information to include?
• What format to use?
• How to present alternatives and make a recommendation?
• How to locate credible data from which the issue is to be evaluated?

Read further in the Assessment 2 Context [PDF] Download Assessment 2 Context [PDF]document, which contains important information on the following topics:

• Regulations.
• Risk Management.
• Risk Sharing.
• Risk Financing.

As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as a part of your assessment.

Imagine that a supervisor enters your work setting accompanied by an unexpected visitor from CMS. Your supervisor introduces you to the Medicare surveyor, who will be interviewing you.

• What is the risk management process in your organization?
• What criteria would you use to determine how well your organization is performing as an ACO?
• What data or resources would be helpful to you?
• How would you explain the concepts of risk management and risking financing activities to your subordinates?
• How would you explain a risk financing continuum to your subordinates?

Overview

Note: The assessments in this course build upon each other, so you are required to complete them in sequence.

Financial risk-management helps reduce the financial impact of risk. There are four main risk management strategies:

1. Risk acceptance.
2. Risk transference.
3. Risk avoidance.
4. Risk reduction.

As a leader in healthcare, your primary goal is to care for patients in a legal and ethical manner that supports the concept of beneficence, to do no harm. These concepts are the general foundation of your organization's mission and vision statements. As history has shown, harm can occur, and regulations are put into place to help lead organizations to ensure quality care is provided. The concept that HROs and ACOs promote is value-based care, which means when the quality of care goes up, costs will go down. For example, it is better for the patient, the community, the organization, and the payors for diabetes type 2 cases to be reduced through preventative care, diet, and exercise versus paying for insulin and the complications of diabetes.

The concepts of doing no harm and meeting regulations infiltrate the healthcare system in many other ways, not just preventative medicine. In this assessment, you will evaluate how your organization or the scenario you have chosen is taking a financial risk by not meeting current regulations. After you identify your risk management issue it is important as a healthcare leader that you assess your situation through a Define, Measure, Analyze, Improve, Control (DMAIC) lens. For example, have you performed a root-cause analysis on your regulation gap to identify what your leading cause of the problem is?

Preparation

For this assessment, imagine yourself in the role of a risk manager. Using the risk management issue identified in Assessment 1 or another concern from your workplace, present a memo to your stakeholders that explains the issue, a recommended solution, and why they are obligated to act on your recommendations. As an example, you might select the issue of reducing HACs within your organization. Refer to the resources provided for this assessment to ensure that you have a solid understanding of the financial dynamics related to this type of issue.

Instructions:

Even if you are in a different role at the organization you have chosen, imagine yourself in the role of a risk manager. Using the risk management issue identified in Assessment 1 or another concern from your workplace, present a memo to your stakeholders that explains the issue, a recommended solution, and why they are obligated to act on your recommendations. As an example, you might select the issue of reducing HACs within your organization. Refer to the resources provided for this assessment to ensure that you have a solid understanding of the financial dynamics related to this type of issue.

Create a 2–3-page internal memo. Follow the steps below and include them in the memo:

• Concisely describe the organization and the risk management issue.
• Summarize the legal and ethical financial risk obligations of an accountable care organization (ACO) or high-reliability organization (HRO).
• Describe a strategy for how you would identify and evaluate the process for reducing or avoiding risk within this organization. Please ensure you evaluate your risk management issue through a DMAIC lens.
• Recommend at least two of the best options for improving your risk management issue, as it relates to the organization in question.
• Using the SMART method, identify key performance indicators (KPIs) for your recommendations.
• Include at least three APA-formatted in-text citations and accompanying congruent APA-formatted references. Your sources can be the course textbook, assigned reading, or any other scholarly source.

Additional Requirements:

• Written communication: Written communication should be free from errors that detract from the overall message.
• Memo format: Format your memo so that it reflects the professional standards of your organization or accepted standards of a professional memo in the industry.
• APA Format: Use appropriate APA format for a clear, concise presentation of information. Communicate information and ideas accurately, utilizing peer-reviewed sources, including proper APA reference citations. Refer to the APA Module to help with APA style guidelines.
• Length of paper: 2–3 double-spaced pages for the written portion of the assessment.
• Number of resources: A minimum of three resources.
• Font and font size: Times New Roman, 12 point.

Competencies Measured:

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 effectively using professional standards embracing diversity, equity, and inclusion.
  • Prepare a professional memo summarizing a risk financing issue for a specified organization.