With the growth of digital health, the ongoing shift to value-based care, and the ever-changing regulatory environment, healthcare risk management has become more complex over time. As the healthcare landscape evolves, so too must the way organizations manage risk.
This blog is the second part of a series on risk management in healthcare. Our first post looks at the basics of managing risk in this industry and its evolution over time. In this blog post, we’ll look at the top risks challenging health systems and integrated delivery networks (IDNs) today.
By understanding risks and taking steps to mitigate them, healthcare organizations can continue to provide high-quality care to patients while meeting strategic objectives. If you’re a senior leader at a health system or IDN, here are three risks that you need to keep your eye on in 2023.
The staffing shortage is serious-and it’s only getting worse
The healthcare staffing shortage is one of the most pressing issues facing healthcare organizations today. Even before COVID-19, health systems and hospitals faced widespread staffing shortages. But the pandemic pushed many healthcare providers to a breaking point.
In 2021, more than 333,000 providers dropped out of the workforce, according to Definitive Healthcare data. In the same year, hospital CEOs ranked personnel shortages as the top concern their organization faced. The chart below shows the number and types of healthcare professionals who left the workforce.
Fig. 1 Analysis of data from Definitive Healthcare’s ClaimsMx and PhysicianView products. Based on the number of providers billing each year (by primary specialty on medical claims). Data accessed August 2022.
With fewer providers in the field, healthcare workers are finding themselves working under increasingly difficult conditions, with more pressure and fewer resources. Staffing shortages and the pressures associated with overworked providers are linked to increased risk of medical errors and, consequently, potential harm to patients. According to one study, the number of central line-associated bloodstream infections (CLABSI) increased 28% in the second quarter of 2020 compared to the same period in 2019.
The impact of turnover on the healthcare workforce is also costly. A study by Avant Healthcare Professionals found that the average cost of turnover for a nurse ranges from $37,700 to $58,400. Furthermore, hospitals have seen their per-patient labor expense increase dramatically in recent years, from $4,009 in 2019 to $5,494 in 2022, due to labor shortages.
The staffing shortage is exacerbated by the fact that the baby boomer generation is reaching retirement age, and there aren’t enough providers entering the healthcare field to replace them. This means the staffing shortage is unlikely to abate anytime soon, underscoring the urgency to proactively manage human capital risks. These may include employee recruitment, retention, and termination; scheduling and staffing; and absenteeism, productivity, and fatigue.
The potential perils of health tech
From electronic medical records to connected medical devices, healthcare organizations today depend on a wide range of technologies to deliver safe and effective care. With the ever-growing reliance on technology, it’s no surprise that cybersecurity risks are also on the rise. In the first half of 2022, there were at least 337 healthcare data breaches impacting more than 19 million healthcare records, according to Fortified Health Security’s mid-year report.
A successful cyberattack could have devastating consequences for both patients and healthcare organizations, compromising sensitive data, and potentially leading to life-threatening disruptions in care. A report by IBM also found that the average total cost of a healthcare data breach was $10.1 million in 2022.
Although technology has created new risks in healthcare, it could also provide a safeguard. According to our healthcare commercial intelligence, about 5,590 U.S. hospitals, or about 76% of U.S. hospitals, have security infrastructure technologies currently installed. These technologies—which are vital to comprehensive risk management—include anti-virus and anti-malware software, data backup systems, encryption, firewalls, spyware filters, and more.
Finding the value in patient safety
If there’s one thing that keeps healthcare executives up at night, it’s patient safety. About 400,000 hospitalized patients experience some type of preventable harm each year. The most detrimental medical errors are related to diagnosis and medications. Furthermore, the total cost of caring for patients with medication-related errors alone exceeds $40 billion each year, with over 7 million patients affected.
Health information technology (HIT), such as electronic medication administration records (eMARs), can help improve patient safety by reducing medication errors, reducing adverse drug reactions, and improving compliance with practice guidelines. (Learn more about eMAR systems installed in U.S. hospitals in this post).
Organizations can also face penalties due to ineffective risk management. In 2021, more than 770 hospitals received Medicare penalties totaling $254 million based on their rates of hospital-acquired infections, according to Definitive Healthcare data.
To help rein in these staggering stats, healthcare organizations must create a culture of zero harm focused on proactively managing clinical risks. Although healthcare organizations have long been under pressure to improve patient safety, this pressure has intensified as the healthcare industry shifts from fee-for-service to value-based care. Under value-based models, patient safety is a key quality measure.
Learn more
If you missed our first blog post on the basics of managing risk in healthcare and its evolution over time, you can read it here.
As you navigate the complex healthcare landscape, healthcare commercial intelligence can help you stay up to date on the latest trends. You can also gain access to the most relevant developments impacting healthcare risk management through our platform. To learn more about how you can use Definitive Healthcare’s intelligence to create new paths to commercial success, start a free trial.
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