Beyond Compliance: How Comprehensive Risk Management Drives Performance in Healthcare

With the immense volume of valuable data they hold and the push to adopt more digital solutions to enhance efficiency, healthcare organizations are lucrative targets for cyberattacks.

And while regulations — like the Health Insurance Portability and Accountability Act (HIPAA) — were developed to help protect sensitive patient information, simply complying with these standards is not enough to protect healthcare organizations from threats. Moreover, without a comprehensive risk management framework that supports overall business objectives, healthcare organizations are prone to operational inefficiencies that increase vulnerabilities and waste resources.

A Compliance-Focused Approach Can Lead to Risk Silos

When organizations treat risk management as a checklist item for maintaining compliance, they foster a disjointed and weak security posture.

Risk silos occur when different business units manage risks in isolation, without adequate communication, coordination, or oversight. This fragmented approach can significantly undermine the effectiveness of risk management efforts.

For example, consider a healthcare organization where:

A siloed approach to risk management ignores risk's connected nature.

This can lead to:

• Conflicting Policies: Each department enforces different security policies, leading to inconsistencies and gaps in protection.
• Duplication of Efforts: Multiple departments might conduct similar risk assessments and mitigation efforts, wasting resources.
• Inconsistent Data: Without a unified approach, data collected from risk assessments may be incompatible, making it difficult to get a comprehensive view of the organization's risk posture.

The Importance of Comprehensive Risk Management

Alternatively, adopting a comprehensive approach to risk management promotes a cohesive framework for identifying, assessing, and mitigating risk across the entire organization. In this case, risk does not just encompass security threats but rather any potential vulnerabilities — whether they be operational, financial, strategic, or other.

The result is a deeper awareness of various risks and an enhancement of operational efficiency that aligns with larger strategic initiatives. Managing risks collectively can help streamline processes, reduce redundancies, and make more informed decisions — which ultimately leads to improved patient care, reduced liability, and better resource allocation.

Using HIPAA as a Foundational Component

The HIPAA Security Rule — HIPAA’s framework for protecting ePHI — mandates that healthcare entities implement physical, technical, and administrative safeguards to secure ePHI.

• Physical safeguards are those that protect systems that store ePHI, like limiting physical access to facilities and securing workstations and devices.
• Technical safeguards are policies and procedures protecting the use and accessibility of ePHI, such as implementing access controls, audit controls, integrity controls, and transmission security measures.
• Administrative safeguards are for monitoring the human element of risk. Examples include designating security personnel, managing information access, training the workforce, and conducting regular evaluations.

However, simply being HIPAA-compliant does not mean an organization is adequately protected against threats.

Compliance alone does not address the dynamic nature of vulnerabilities.

Transitioning to a Unified Risk Management Framework

To move beyond a compliance-focused approach, healthcare organizations must adopt a comprehensive and integrated risk management strategy. Here’s how to transition effectively:

1. Assess Current Risk Posture

Conduct a thorough evaluation of your current risk management practices and identify existing silos. Understand the gaps and overlaps in your risk management efforts across different departments.

2. Develop a Risk Management Strategy

Create a comprehensive risk management plan that aligns with your organization's strategic goals. This plan should encompass all types of risks — including operational, financial, strategic, and security risks — and outline a coordinated approach for managing them.

3. Enhance Communication

Foster a culture of open communication and collaboration between departments. Establish regular cross-departmental meetings to discuss risk management strategies, share insights, and ensure that everyone is on the same page.

4. Implement Risk Management Tools

Invest in risk management tools that provide a unified view of risks across the organization. These tools should facilitate data sharing, streamline risk assessment processes, and support real-time monitoring and reporting.

5. Monitor and Adjust

Continuously monitor the effectiveness of your risk management efforts and adjust as needed. Use metrics and key performance indicators (KPIs) to track progress and identify areas for improvement.

Minimizing Risk Leads to More Efficient Operations

Developing a culture of risk management directly contributes to various performance metrics within healthcare organizations. By reducing risks and improving operational efficiency, healthcare providers can achieve better outcomes in several key areas, including:

Achieving Security, Compliance, and Optimal Performance

Effectively managing risk requires recognizing that security and compliance are not synonymous. While HIPAA provides essential guidelines for securing patient data, achieving adequate risk mitigation necessitates a more comprehensive approach.

High-performing organizations understand that meeting compliance standards is just the starting point. By integrating risk management into their strategic framework, they not only safeguard sensitive information but also enhance operational efficiency and support innovation.

At Eide Bailly, we help healthcare organizations strike a balance between risk management and innovation. Our experienced advisors will work to elevate your organization’s security posture, maintain compliance, and gain a competitive edge.