Why Risk Management is Essential to Your Business
The risk management process consists of two major steps. The first is identifying the potential risks that your business is exposed to. The second is coming up with strategies that will counter or at the very least mitigate any consequences if those risks are actually realized. Every business and organization requires this for its effective running; more so when issues of health information and health insurance are involved.
For a start, your organization must comply with HIPAA regulations. The Health Insurance Portability and Accountability Act has four main targets. It provides for transfer and continued health coverage of workers if and when they lose their jobs or move to another company; it standardizes health care processes such as billing; it mandates that health information be handled confidentially and securely; and lastly it is aimed at minimizing health care fraud. All organizations are required to meet with certain HIPAA requirements.
You are obligated to carry out risk assessment. When it comes to health information, this means assessing any risks that may compromise its confidentiality. Once this has been done, appropriate strategies of risk management must be devised and put into place. HIPAA requires that these controls must be adequate to deal with these risks. They can be anything from physical controls such as restricting building or office access, to technological safeguards, such as encrypting data.
HIPAA does not just benefit your employees, it benefits your business as well. To comply with the act, health care data must be accurate. This eliminates any risk of fraud to your business. Health informatics and medical informatics uses technology to collect accurate data, as does LIMS (Laboratory Information Management System). These are controls that will eliminate any chances of your organization covering any situations not included in your health plan. Also important to the efficient running of your business is data analytics. Any data must be properly processed, analyzed and reported. All these can help you to come to a decision on which strategies you should use to manage risk.
Different organizations use different risk management strategies. However, the ISO 31000, published in 2009, offers a template from which you can model your risk management strategy on. It is a resource that is found useful by those responsible for assessing and managing risk in their organizations. It is not a legal requirement to comply with this document but it proves very useful as a guide.
How effective your risk management will be is dependent on corporate governance in your organization. This is one more reason corporate governance is important to running an organization smoothly. If good governance is in practice, the level of risk can be greatly reduced. Whatever risk is still a reality to your business, good governance will greatly improve your ability and success in managing risk.
Risk management is very important to your organization. It involves risk assessment and putting controls in place to eliminate or mitigate any consequences if the risks become a reality. Compliance with the HIPAA act is a legal requirement. Its overall aim is to benefit organizations and their employees. Certain information systems can help you in your decision on which controls to put in place. Corporate governance also plays a big role in how effective those risk management strategies will be.
The GRC Bluebook is a community of GRC professionals dedicated to complying with all of the HIPPA regulatory systems. The community of risk assessment professionals communicate and express their opinions on the myriad of tools and resources available for GRC tasks.
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