(2) Objective Setting: The process of understanding how corporate objectives and risks interrelate and how they can affect the achievement of an entity's goals.
(3) Event Identification: Determine significant events that would affect the entity's objectives. Distinguish risks vs. opportunities.
(4) Risk Assessment: Risks are analyzed, considering likelihood and impact, and should be evaluated on an inherent basis or a residual basis. Inherent risk occurs without consideration of mitigating controls currently in place and residual risk occurs in light of existing controls.
(5) Risk Response: The method by which management responds to risks whether through avoidance, acceptance, reduction or sharing (also known as avoid, retain, control and transfer) and in doing so, maintains that the risks remain in line with the entity's risk tolerances and risk appetite.
(6) Control Activities: The organization develops and implements policies and procedures to ensure that the risk responses are carried out.
(7) Information and Communication: Relevant and timely information regarding risks is identified, captured and communicated throughout the organization; flowing down, across and up through the ranks, and (8) Monitoring: The ERM program is monitored, updated and maintained through ongoing management evaluations. (Brannan and Taylor, nd, p.1)
Issues that the health care organization presently faces include those shown in the following illustration labeled Figure 1 in this study.
Figure 1
There are various aspects of risk management within the health care organization and there is a limitation of time and space in conducting a thorough review of all of these however, this work has identified 'Enterprise Risk Management' as being a primary and powerful tool in addressing the factors of risk management in today's organization.
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