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Risk and Quality Management Assessment

Free Management Essays Risk and quality management form the fundamental part of the organization strategy. Blue Cross Blue Shield is an insurance organization in Georgia. The organization offers a wide range of insurance covers for both family and individuals. The organization has been in the insurance business for more than 70 years. The organization also constantly continues adjusting its approach to quality and risk management in order to comply with the changing community needs, government regulation and other legal frameworks within the industry. In this paper, the risk and quality management approaches embraced by the organization will be explored in details.

Purpose of Risk and Quality Management

Organizations and individuals have always strived to find ways of reducing the risk and improving the quality. Risk management initiatives were established to manage the organization’s risks and help eliminate adverse results and reduce the organizational losses. Quality management is a systematic and progressive process in the organization used to deliver product and services that meet or exceed the consumer’s expectations (Grant, 2010). Moreover, quality management and risk management are pre-emptive perspectives that offer a long-term focus on maintaining the organization through reduction of losses resulting from events and via improving the product and services offered. Such program is important in providing checks and balances for the organization in respect to accreditation, standards and policies (Agarwal, 2010). They permit the organization to grow and improve services in terms of service delivery. Without such checks and balances, an organization may easily loose revenue, customers and loyal employees.


Quality and risk management forms the core basis of most insurance company. Besides, there are major models that are considered collective in quality and risk management in Blue Cross Blue Shield insurance company. The key concepts include a link to major elements of the organization’s strategic plan to incorporate organization mission and vision. It also entails a council made up of the organization top leaders who support the organization programs and functions. Training programs are orgaized for the organization personnel to understand their mandates in regard to quality improvement and risk management. Formation of process teams also forms key concept together with a mechanism for selecting risk mitigation and improvement of opportunities (Grant, 2010). In addition, the organization has personnel written policies and procedures that act as a motivation for the support staff to participate in process improvement and risk management. The organization further applies the most current and rigorous techniques of statistical and scientific control. Lastly, the organization uses structured decision-making process supported by the staff.

Steps to Identify and Manage Risk

When the above major concepts are implemented, BCBSGA steps into the process of identifying and managing the risks. Perceiving risk management as a process enables the risk management professional to set priorities and facilitate in ensuring that a comprehensive risk management effort is successful (Cutler, 2010). In an organization, the risk management process is achieved through five key steps.

Identifying and Analyzing Loss Exposure

The first step consists of two processes that encompass risk identification and analysis. In the risk identification, the organization needs to identify the risks that may lead to loss exposure in the organization. Numerous methods can be used to identify such risks to encompass: incident reports, occurrence screening, patient complaints and satisfaction surveys, prior medical professional liability, property and casualty, workers compensation claims data, survey by the Joint Commission (TJC), the National Committee on Quality Assurance (NCQA), liability or other insurers, risk management consultants, contract, leases and agreement, information produced through the organization’s performance enhancement functions and informal debate with managers and the organization staff (Grant, 2010). When the risks are pinpointed, the organization is required to analyze the potential sternness of the loss and the probability that such loss might occur in the future.

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Considering Alternative Risk Techniques

The organization needs to take into consideration the alternative risk techniques. Risk treatment strategies usually incorporate two major categories; risk financing and risk control. Risk control entails prevention of losses and moderation of the losses’ magnitude. On the other hand, risk financing entails paying for the losses that do not occur (Cutler, 2010). In an organization, Risk control entails practices such as loss prevention, exposure avoidance, loss reduction and separation of the loss exposures, as well as non-insurance transfer. On the other hand, risk financing focuses on the means of generating funds to pay for losses that risk control methods fail to eliminate. Such techniques entail risk retention and risk transfer.

Selecting the Best Risk Management Technique

This step entails two processes that the organization needs to predict the impacts the available risk management techniques options may have on the organization’s ability to fulfill its organization goals, and then establish and utilize criteria that measure how well each risk management technique contributes to the organizations objectives in the most cost-benefitial way. The selection is either obtained from the risk financing or risk control and sometimes from a combination of the both methods.

Implementing the Selected Technique/Method

The organization has selected the technique that best reduces the risk. Once the method is selected, the risk management professional implements the process in order to accomplish risk mitigation across the organization (Grant, 2010). In some sections of the organization, especially those that are not within the scope of the risk management professional’s analysis, the risk manager permits the appropriate professional to implement the necessary risk management technique.

Monitor and Improve of the Risk Management Program

Step five is the final step because it entails evaluation of the effectiveness of the risk management techniques used to reduce the risk. The risk management evaluation process assumes a multidisciplinary approach from various groups within the organization. The process offers an insightful look at the risks and produces a feedback from the group on the step required to identify and manage the risks (Carroll & American Society for Healthcare Risk Management, 2001). The process ensures fairness and explores all the possible options that lead to reduction or elimination of the risks. Once the process in finished, the risk management professional develops a detailed report that outlines the risks, changes implemented, benefits to the organization and the procedures used to pinpoint and implement such changes in the organization.

Risks Identified in the Organization

In an organization, there are numerous risks that involved the major insurance issues. Such risk posed negative effect on the quality of insurance services delivered to the consumers. In BCBSGA, three types of risks that affect the quality of organization services have been recognized. They include Violation of Health Insurance Portability and Accountability Act (HIPAA) – when the violation of customer’s privacy or personal health information takes place, or when the organization staff is prosecuted because of the violation, the staff can face a feloniouspenance. Insurance fraud is another key risk in the organization (Blue Cross Blue Shield of Georgia, n.d). For example, a medical services provider have charged consumers for services that were not rendered and fileded a claim against the organization. If left unchecked, this can result in loss of revenue, customers and accreditation. The third risk is the contractual disagreement with the healthcare organization. For instance, recently BCBSGA failed to renew its contractual agreement with Medical College of Georgia (MCG) for insurance coverage of Blue Cross members. Consequently, it led to loss of customers and revenues and enhanced development of negative publicity that led to decline in the number of new customers of the organization (Blue Cross Blue Shield of Georgia, n.d).

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External and Internal Factors that Affect Quality

There are a number of both internal and external factors that significantly influence the quality outcome within an organization. Specifically, these factors tend to impose a significant negative effect on the quality of service outcome. One of the key external factors in the health insurance business is the US Health Reform and the Affordable Care Act. The institution of the law made the health insurance service more affordable and accessible to every citizen, irrespective of the preexisting medical conditions (Cutler, 2010). Though the law was not initially accepted, and the insurance industry fought to make the law unconstitutional, the change caused a negative perception among the medical workers. Consequently, this impacted the personnel directly. For instance, if the personnel failed to follow the instituted law as directed, people would go without coverage and start to launch complaints. As a result, it would lead to loss of organization accreditation, loss of revenue and imposition of government fines (Agarwal, 2010). Another key factor is the contractual agreement, which can be internal and external. Internally, the quality of service is usually affected due to loss of reliability and revenue. Externally, the organization may resolute to abandon the BCBSGA coverage and drop the contract during the renewal. Overall, such aspect would significantly influence the business of the insurance company.

Organization Short Term and Long Term Goals

In any organization, success is driven by focusing on both short term and long term objectives. Such goals are normally outlined in the mission statement. BCBSGA remains dedicated to delivering the best care services to its members and to providing a greater value to their customers. Moreover, it strives to help to enhance the quality of health care for communities living in the state of Georgia (Blue Cross Blue Shield of Georgia, n.d). In addition, the organization goals are undergoing changes based in respect to the dynamics in healthcare, community needs and government regulation. BCBSGA endeavors towards making health coverage more affordable for individuals without medical insurance coverage and keeping if affordable for the existing members to ensure they remain insured (Blue Cross Blue Shield of Georgia, n.d).


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Fundamental Risk and Quality Management

There are three crucial risks and quality management policies that need to be embraced within the organization. They include:

Awareness Creation

It is essential to raise the awareness of all organization staff members, employees, senior managers and the residents and volunteers regarding risk management approach. Such objectives can be achieved through the establishment of a risk management committee with the representatives from key departments of the organization. The team needs to mandate with the responsibility of implementing, monitoring, evaluating and revising plans to expedite the accomplishment of the set aims and intentions. It is also important to select a risk management coordinator to act as the head of risk committee reporting to the council.

Compliance with Affordable Care Act 2010

The policy decreases the risk of negligence among the staff and improves the quality of services through provision of information regarding new guidelines.

Compliance with the Guideline Set by HIPAA

Strict compliance with HIPAA guidelines is essential, since such policy ensures that violation of the set guidelines is restricted, and that will openly enhance reassurance to the consumer that the insurance company can be trusted.

Relationship between Quality and Risk Management

Quality and Risk management are two separate entities but have a continuous working relationship in the organization. They both possess similar tools required to perform their key functions. In both programs, research, analysis and practices remain key skills applied in both platforms. For instance, risk management investigates trends in the past and develops risks. On the other hand, quality management applies research in order to find new trends in ways of improving the quality within an organization (Carroll & American Society for Healthcare Risk Management, 2001). In both, analysis is collective and is utilized to institute means of mitigating risk and enhancing the value of the given tasks. Moreover, both programs depend entirely on organization leadership team to offer authority and support. Risk management develops quality work, and quality management establishes the guidelines to lessen the possibility of a risk occurring. When established policies, regulation and guidelines are followed, it is less likely that the employee will institute a risk or a risky environment. Therefore, an active risk and quality management program saves the business both revenue and time while augmenting the value of the organization.

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