Risk managers in the healthcare and the professional-services sectors appear to be the most receptive patients for an enterprise risk management operation in the two-year period from 2004 to 2006, according to a new survey released by the Conference Board Inc., a New York-based nonprofit that provides business research.
A total of 57 percent of healthcare industry respondents said that risk issues were a "high-priority objective" in their risk management programs, compared with 32 percent of the respondents in 2004. That translates to an increase of 25 percentage points.
One reason for the big increase in attention to risk issues and risk management among companies in the healthcare sector has to do with the economic pressures facing the industry, said Ellen S. Hexter, director of the Enterprise Risk Management Center for the Conference Board and author of the study.
The aging U.S. population is expected to put more stress on the nation's healthcare system at a time when the government is rationing the medical benefits it provides, said Hexter. "That's a big overhang that's going on in the industry."
In the business and professional-services sector, which is often called upon to audit and make sure companies comply with federal reporting laws, the number of respondents who considered risk issues a high priority shot up to 71 percent in 2006, from 45 percent in 2004, for an increase of 26 percentage points, the survey found.
Enterprise risk management isn't nearly as pressing a concern in other industries, the survey also found.
The percentage of respondents in the financial services industry that said risk issues were explicitly considered in decision-making was 54 percent in 2006, up from 49 percent in 2004. In the energy and utilities industry, it inched up to 62 percent from 60 percent in the period.
Another reason for the increase in enterprise risk management within the healthcare sector has to do with next year's presidential election. Candidates from both parties have promised to reform the healthcare system, which failed to cover nearly 45 million people--or about 15 percent of the population--in 2005.
"Not only do you have economic forces on the healthcare industry, but there are big questions with the 2008 election, so if you can manage risk well now, you're ahead," Hexter said.
She pointed to the drive among healthcare companies to shift from paper-based record-keeping to electronic record-keeping. Storing and transmitting health records electronically entails significant risk as computer systems are vulnerable to breaches.
The results of the biennial survey of risk, audit and finance executives was sponsored by Oliver Wyman and released in November. Of those companies surveyed, 78 percent had more than $1 billion in revenue.
January 1, 2008
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