The Southern California Safety Institute Services

The Risk Management Process in Safety Management Systems

The healthcare industry is both complex and unique. The demands on healthcare practitioners are great and, in many cases, the requirements are not accurately communicated to upper management. Stakeholders across all levels have called for an increased level of safety, but often are unwilling to accept the price of safety. The core requirement for an SMS is an effective method of identifying and controlling risk.

The concept is described as:

The risks and costs in the delivery of healthcare necessitate a rational process for decision-making. Daily, practitioners and providers make decisions in real time, weighing the probability and severity of any adverse consequences implied by the risk against the expected gain of taking the risk. This process is known as Risk Management.

The bottom line in the healthcare field is to implement safety improvements in the most cost-effective manner possible. The Operational Risk Management (ORM) approach will give your safety program the tools and methods necessary to meet the requirements of a Safety Management System for identifying and controlling risk. Without such knowledge, it is unlikely that any organization can fully and effectively meet the standards for an SMS, or achieve status as a High Reliability Organization.

Risk Management is a systems-based approach that focuses on the identification of hazards involved in each aspect of the operation, whether it involves inter‐ or intra‐departmental communications, infection control protocols, medication procedures, shift change, surgery, admissions, etc. As an integral and required part of a Safety Management System, Operational Risk Management formalizes this approach by implementing a logic-driven process to analyze the degree of risk associated with identified hazards, recommending Risk-based solutions, and monitoring the effectiveness of these solutions. This method is graphically demonstrated by the model shown below. Called “The Modern Approach to Safety” it is in effect, a model of the ORM approach as taught by SCSI.