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By DR. SANJAYA KUMAR, president and chief medical officer of Quantros Inc.

The benefits of a comprehensive risk management information system (RMIS) include fewer medical errors, opportunities for reserve reductions, fewer nonreimbursable events and the ability to negotiate better medical malpractice insurance rates from carriers. An RMIS is a more tangible means of assessing the risk profile of an organization and consequently of securing ample liability coverage.

Beyond the cost of claims, preventable medical errors stress the entire healthcare environment--reimbursements are denied by payers, patient days increase, staff demands rise, medical malpractice and general liability insurance premiums increase.

In an industry where margins can be razor thin, a well-functioning RMIS system can help healthcare providers increase an annual surplus or profit. An effective RMIS can even turn a fiscally poor-performing organization into a thriving institution.

Without a focused effort on improving patient safety, an effort that includes the implementation and use of an RMIS, the cost of claims will continue to rise. According to the 2010 Segal Health Plan Cost Trend Survey, "Inpatient hospital claim trends are expected to increase in 2010, exceeding both prescription drug and physician claim trends."

However, a concentrated effort on preventable error reduction coupled with sound financial practice can shift this trend.

CRITICAL RMIS DECISION CRITERIA

Not all RMIS systems are created equal. Healthcare organization need to choose a system that addresses the entire risk management workflow. This workflow encompasses the needs across the healthcare environment but should also support those areas outside the hospital.

For example, a solid RMIS system should provide:

-- appropriate aggregate analytics for use in demonstrating performance improvements to both insurers and payers

-- a means of securely reporting event data to federal and state patient safety initiatives

-- an open platform for integration of relevant data from other healthcare data sources where applicable

How ready are you for an RMIS?

In addition to selecting the right RMIS, healthcare organizations need to assess their own capacity for change. Organizations should consider the following three areas:

-- Leadership Support: Ensuring that your executive team fully supports improvements is vital to RMIS system implementation and use throughout the healthcare provider organization.

-- Culture of Safety Assessment: The optimal RMIS implementation occurs in an environment that has a healthy culture of safety already present and is in need of tools to support further progress. An RMIS can be an agent of change with leadership support but adoption and usage are much better when the healthcare organization already has a mind and eye for improving safety.

-- Honest IT Assessment: An RMIS is a complex, multidimensional system. If IT resources are limited, as most are, then choosing an RMIS that is hosted externally is your best bet. This model eliminates costly IT capital expenditures and minimizes the demands required from healthcare provider IT resources during initial implementation as well as ongoing RMIS maintenance.

As is the case in selecting any enterprisewide system, there are numerous stakeholders with varied opinions based on their responsibilities. The RMIS decision involves virtually every part of an organization.

The risk management department, as the name suggests, usually leads the consensus building process. The IT organization typically advises to ensure that the myriad of technological concerns are sufficiently addressed. Nursing, finance, medical affairs, legal, and the C-Suite all play a role in the decision-making process. Including all these stakeholders as part of the RMIS decision process will help secure buy-in and promote active participation.

Selecting the right system is a product of thorough research and evaluation coupled with an understanding of the all the variables that exist. Finding a partner that understands a healthcare provider's needs and has a demonstrated history of success with other organizations will help. The work associated with implementing the right RMIS will enhance the care environment provided to patients and also ensure optimal financial performance over time.

For more resources on RMIS selection, please visit:

-- American Society for Healthcare Risk Management

-- Health Level Seven Inc. (HL7)

-- Healthcare Information and Management Systems Society (HIMSS)

-- Risk and Insurance Management Society (RIMS)

March 1, 2010

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