Areas of Risk
Our experience demonstrates that as health and healthcare organizations launch and operate a strategic plan, multiple tactics are activated. A single tactic never exists in a vacuum; i.e. no tactic operates in isolation of all others in-play. Much of the time management oversight is focused on the performance goals of the tactics (which makes sense). Frequently, however, the totality of the "integrative risk" (risks associated with the interaction of multiple tactics in-action) are unknown or at least, under appreciated.
We provide here a list of "risk-of-strategy" categories that we examine to ensure that the performance of strategy is effectively managed with attendant risk.
- Brand promise: Risk derived from the ability of the organization to deliver on implied duties, obligations and accountabilities to patients and markets served.
- Transactional: Risk that occurs from managing or entering into one or multiple integrating transactions within identified time frames.
- Clinical network: Ownership and management risks related to the assembly and management of, oftentimes, hundreds of providers affiliated by multiple agreements operating under a unified and common health system brand.
- Partnerships, joint ventures, professional services and management service agreements: risks accruing from the need to create multiple legal mechanisms to pursue strategy.
- Financial: Organization's ability to effectively finance and fund complex strategies (i.e., cashflow, balance sheet capacity, and credit risk).
- Clinical quality and patient safety: The risks to patients derivative of their interactions with complex clinical services, operating systems, and delivery models.
- Vendor partnerships: Risks that derive from new business models where vendors and providers collaborate toward common strategic goals.
- Governance: The risks that accrue to Boards overseeing complex organizations containing multiple governance layers as a result of mergers, acquisitions and joint ventures.
- Population health strategies: Healthcare providers sharing financial risk (insurance risk) for defined populations (i.e. insurance risk).
- Medical staff management: The risks occurring from hospital medical staffs operating under new organizational designs.
- Employed physicians: The risks of assimilation of physicians as employees operating under various employment agreements, compensation plans and management models.
- Real estate/ facilities risk: Organizations (health systems and independent medical practices) become hemmed-in by legacy real estate relationships (ownership, lease or capital investment capacity) which negatively affects their ability to execute on a worth while strategy.