Risk and Quality Management

Riskand Quality Management

Riskand Quality Management

Thedemand for quality services has increased the significance of qualitymanagement while the increase in uncertainty in the health careindustry has necessitated the use of risk management techniques inthe health care sector. Quality management is defined as a systematicprocess that help organizations in delivering services or productsthat address the unique needs of consumers (Sollecito &amp Johnson,2011). Quality management should be a continuous process, which meansthat organizations should embark on an endless process of enhancingthe value of its services and products. This ensures that theservices or products offered by the organization are consistent withthe dynamic needs of the consumers. Risk management, on the otherhand, refers to the process that involves making decisions that helporganizations in preventing adverse events and reducing impacts onthe organization (Sollecito &amp Johnson, 2011). This executivesummary will focus on quality and risk management at Robert WoodJohnson University Hospital.

RobertWood Johnson University Hospital

RobertWood Johnson University Hospital is a health care facility that wasfounded in 1885. The hospital is located in New Brunswick in theState of New Jersey. It has a bed capacity of 965 and campuseslocated in Somerville and New Brunswick (Robert Wood JohnsonUniversity Hospital, 2015). The hospital offers a wide range ofservices that include cancer care minor heart surgeries, trauma care,women’s and children’s care. The Joint Commission recognizesRobert Wood as the best and the most comprehensive cancer facility inthe United States. Its mission is to enhance the well-being as wellas the health of the community and the patients it serves while itsvision is to be the leading as well and the nationally recognizedmedical and academic center (Robert Wood Johnson University Hospital,2015).

Purposeof quality and risk management

Healthcare organizations use different strategies to manage risks andenhance quality. Risk management programs are designed with theobjective of enhancing the organization’s capacity to identifyperceived as well as potential risks before they occur (Dioguardi,2015). This helps the health care organizations in developing soundplans to minimize, accept, or eliminate the risks. Effective riskmanagement programs minimize losses and protect the health careorganization from adverse outcomes. The purpose of qualitymanagement, on the other hand, is to help the organization deliverservices that meet the expectations of its clients (Sollecito &ampJohnson, 2011). Quality management and risk management can beregarded as proactive measures that help the organization to perceivethe future and plan for it before unexpected events occur.

RobertWood Johnson University Hospital has employed highly qualified riskmanagement experts, who manage different types of risks, includingannual claims and litigations in various medical centers (Dioguardi,2015). Although Robert Wood Johnson University Hospital has itsquality control units that are established to ensure that qualitymeasures are applied in all operations, quality is perceived to bethe responsibility of all employees. Quality control units managequality by benchmarking the services offered by the hospital withother health care facilities (Dikin, 2014). Therefore, effectiverisk management strategies have protected the hospital from incurringlosses, while quality management has increased the loyalty ofclients.

Conceptsof quality and risk management

Thereare several concepts that are found in the risk management programsof the Robert Wood Johnson University Hospital. First, the incidencereporting system is a framework that helps the hospital in detectingand reporting any unforeseen events to the relevant authorities(Robert Wood Johnson University Hospital, 2015). This is accompaniedby the concept of incidence response, which describes the hospital’scapacity to address incidents as soon as they are discovered. Theconcept of adverse events encompasses all events that are likely toaffect the hospital operations in a negative way. Patient safety is acommon concept that describes the hospital’s strategies that havebeen developed to protect clients within the hospital facilities.

Differentconcepts of quality management are ingrained in the hospital’smission statement. For example, the concept of excellent environmentsuggests the hospital’s mission to provide the best quality ofcare. In addition, the concepts of medical discoveries and innovativetherapies suggest the Hospital’s investment in continuousimprovement, which is the backbone of quality services (Robert WoodJohnson University Hospital, 2015). Moreover, the concept of qualityimprovement indicates the Hospital’s commitment to continueoffering quality services by improving its operations.

Stepsused in the identification and management of risks

Organizationsuse five major steps to identify and manage their risks. The firststep involves the identification and analysis of loss exposure(Carroll, 2009). Risk identification involves the determination ofevents that are likely to cause loss to the hospital in case theyoccur. Risks can be identified through different strategies, such asincidence reporting, patient complaints, and surveys. Afteridentifying the loss, the management should perform the analysis ofthe potential severity of perceived loss as well as the chances thatthe loss might occur.

Inthe second step, the organizations consider alternative risktechniques. Risk techniques are classified into risk financing andrisk control techniques. Risk financing focuses on differentstrategies that organizations use to generate funds to pay for lossesthat the risk control measures to prevent or eliminate (Carroll,2009). These techniques may include risk transfer, which involveshifting of the loss to an insurer through a contractual agreement.Alternatively, the organization may decide to retain losses by usingits own resources to cater for the outcome of the risk. Risk controlstrategies include exposure avoidance, loss reduction, and lossprevention.

Inthe third step, the organization selects the most appropriate riskmanagement technique. The organization considers the potentialoutcome of each technique, and selects the one that has more benefitsand its implementation is cost effective (Carroll, 2009).

Thefourth step involves the implementation of the technique that hasbeen selected. The relevant stakeholders (including employees anddepartments) are instructed to adopt and implement the selectedstrategy with the objective of preventing or reducing loss across theorganization.

Lastly,the organization monitors and evaluates the effectiveness of thestrategy that has been implemented to determine if it is successfullyreducing the risk or the loss. Evaluation can be achieved by gettingfeedback from the parties that are expected to implement the strategy(Carroll, 2009).

Actualor typical risks and how they might affect quality in theorganization

Oneof the three risks that the Robert Wood Johnson University Hospitalis likely to face is aging of infrastructure and facilities. Thehospital has been in existence for more than a century (founded in1885), which means that some of its facilities could be more than ahundred years (Robert Wood Johnson University Hospital, 2015). Theseoutdated facilities and equipment can prevent the health careproviders from delivering quality care to their clients. The secondtype of risk is the rapid increase in the cost of delivering healthservices. Since cost is an industry-wide issue, Robert Wood JohnsonUniversity Hospital cannot be an exemption. This means that thehospital may not be able to acquire adequate equipments and othermedical suppliers, which will reduce the quality of care (Collins,2014). Third, financial risks have increased tremendously in thehealth care sector following the increase in demand for quality,client convenience, and clinical costs (Collins, 2014). These factorsmight reduce the capacity of the hospital to meet its financialtargets, which will in turn reduce its capacity to deliver qualitycare to clients.

Externaland internal factors influencing quality

Thecapacity of Robert Wood Johnson University Hospital to deliverquality care may be affected by both external and internal factors.One of the key external factors is the effect of lagging ofreimbursements behind inflation. Although the hospital is anon-profit making institution, reimbursements are critical for itsgoing concern since they help it meet operating costs (Robert WoodJohnson University Hospital, 2015). However, the long-term states aswell as federal budget deficits have contributed towards the laggingof reimbursements compared to the rate of increase in the cost ofoperations. The quality of leadership in the hospital is an internalfactor that influences the quality of care. An incompetent team ofleaders might not be able to adopt the suitable strategies, whichwill reduce the quality of care. Lastly, staffing is a commonchallenge in the health care sector that has a direct effect on thequality of care. Robert Wood Johnson University Hospital reported ashortage of inpatient psychiatry in 2013, which is likely to reducethe quality of care that is delivered to hundreds of hospitalizedpatients (Johnson, 2013).

Long-termand short-term goals


  • To foster the environment of excellence for the provision of quality care

  • Diffuse medical knowledge in order to advance patient care

  • To enhance the overall quality of life of its clients by relieving and preventing symptoms, pain, and distress that result from serious illnesses (Robert Wood Johnson University Hospital, 2015).


  • The goal of the diabetes center at Somerset Campus is to increase its capacity to help clients with diabetes lead a completely normal and full life.

  • The goal of children`s center is to enhance its capacity to improve the capacity of children with communication disorders acquire the skills they need to participate in social, academic, and home life.

  • To become a leading academic medical institution in terms of quality health care services (Robert Wood Johnson University Hospital, 2015).

Qualityand risk management policies

Employeetraining policy: training all employees on the possible sources ofrisk and how to avoid them can make risk management an all inclusiveaffair in the hospital (Sollecito &amp Johnson, 2011). This willensure that the safety of patients and employees is maintained in allunits, thus enhancing the quality of health outcome.

Riskidentification and analysis policy: This policy will ensure that thehospital adopt strategies that help in early identification of risks,which will in turn help the management in taking the necessarymitigation measures.

Qualitymanagement policy: A comprehensive quality management policy thatwill facilitate a regular assessment of the standards of care andbenchmarking of services offered by the hospital with those offeredby other facilities. The policy will also focus on training of allemployees on the modern ways of delivering health care services.

Relationshipbetween quality management and risk management

Boththe quality management and risk management use the cause and effecttechniques in deciding which preventive and corrective actions aresuitable (Rapaport, 2014). In addition, both strategies have ways ofaccounting for uncertainties. For example, perfect quality service orproduct does not exist. Therefore, handling of risks can beconsidered to be the day-to-day function of the successful qualitymanagers. This implies that risk management affects all levels of thequality management system. Successful organizations should focus oncreating synergy between quality management and risk management inorder to enhance their competitive advantage in the long-term.


Qualityand risk management are critical activities in the health care sectorbecause they influence the performance as well as the going concernof the health care organization. Quality management helps health careorganization in delivering services efficiently and economically. Inaddition, the process of quality management helps health careorganizations in delivering services that address the unique needs ofthe target clients. Effective quality management strategies shouldhelp the organization adjust its services to meet the changing needsof consumers. Risk management increases the organization’s capacityto identify, address, prioritize, and eliminate sources of failure.Risk management is regarded as a predictive, preventive, andpreemptive process. The processes of quality and risk management areproactive processes that help the management of health careorganizations in addressing issues before they occur. Effective riskmanagement strategies should help the organization in detectinginternal as well as external threats before they occur or minimizethe impact of adverse effects that have already occurred.


Carroll,R. L. (2009). Riskmanagement handbook for health care organizations.San Francisco, CA: Jossey-Bass.

Collins,A. (2014). Potentialrisk and quality management issues and how they may affect thehealthcare industry.Santa Monica: Demand Media.

Dikin,A. (2014). RobertWood Johnson University Hospital, Hamilton.Somerville: Care Fusion Corporation.

Dioguardi,C. (2015). Claims coordinator, risk management at RobertWood Johnson University Hospital. LinkedIn.Retrieved August 30, 2015, fromhttps://www.linkedin.com/pub/colleen-dioguardi-cphrm/80/1ab/893

Johnson,K. (2013). Robert wood Johnson University Hospital in Hamiltonintroduces telepsychiatry. NewJersey On-Line, LLC.Retrieved August 30, 2015, fromhttp://www.nj.com/mercer/index.ssf/2013/07/robert_wood_johnson_university_hospital_in_hamilton_introduces_telepsychiatry.html

Rapaport,M. (2014). Finding common ground between quality management and riskmanagement. IQSQuality Management.Retrieved August 30, 2015, fromhttp://www.iqs.com/iqs-blog/common-ground-quality-management-risk-management/

RobertWood Johnson University Hospital (2015). A letter from our presidentand CEO. RobertWood Johnson University Hospital.Retrieved August 30, 2015, from http://www.rwjuh.edu/rwjuh/home.aspx

Sollecito,A. &amp Johnson, K. (2011). McLaughlinand Kaluzny’s continuous quality improvement in health care.Sudbury, MA: Jones &amp Bartlett Publishers.