Operational Risk

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people and systems – as well as external events (such as changes in funding systems).

So What’s Involved?

Put simply, it involves identifying the aspects of your project or service that are critical to success and tracking these regularly. A good example might be the number of referrals taken, or the number of attendances. You also want to think about the factors that enable these critical aspects to happen, and make sure that they do happen, on an ongoing basis.

Monitoring key variables regularly is the key to effective risk management. When this occurs, problems (or potential problems) can be identified early and proactive decisions can be made to offset and manage any unforeseen challenges. For example, having inadequate booking or follow up systems can mean that patients either don’t get booked for appointments or forget to turn up.

If the drop in attendance is identified immediately, this problem can be addressed before profitability is affected. Likewise, making people wait for long periods can lead to a drop in attendance, while letting funding requests sit un-actioned for too long can also cause further delays.

These challenges occur regularly (and sometimes unpredictably) in health organisations. Keeping an eye on program statistics ensures that any adverse impacts can be tracked and minimised. Ultimately, what you’re aiming for is to develop a realistic set of service data that matches – or betters – your original business forecast.

Know your Key Clinical Variables

Is someone tracking clinical outcomes? Are people getting better? If not, then why not? In addition to causing frustration for staff and patients, consistently poor treatment outcomes are bound to impact on service usage in the medium- to long-term.
Effective communication needs to be in place – both up the organisational tree (i.e. when funding arrangements are reviewed as part of contract re-negotiation) and laterally (i.e. staff training in relation to new systems and processes). In a busy allied health environment, tracking operational risk enables people to be oriented to the important priorities (like booking appointments or billing correctly) which are easily overlooked but essential to long-term service sustainability.

The Pay-Off

If you get it right, your service will develop, patient outcomes will improve, referrals will increase, staff will be more engaged; and the reputation of your service will grow. Have you assigned a team member to “champion” operational risk management and review with the team regularly? Could be a good time to start.

Innovative Rehab works with health services to design and implement quality allied health programs. We work with services to facilitate the management of operational risk in populations where recovery from chronic illness is complicated by psychosocial barriers.

Want to know more? Drop us a line. We’d love to hear from you!

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