Tag Archive: risk analysis

Understanding How Risk Management Can Improve Organizational Performance

One of the biggest challenges in risk management is risk identification. Humans are naturally optimistic, therefore we do not like to recognize or discuss risks. We need to incorporate processes such as scenario planning and the pre-mortem technique into our forecasting practices. These techniques help us overcome our aversion to recognizing and discussing risks. Only after we have identified risks can we implement tactics to reduce their probability.

Merit is frequently asked to help businesses, federal agencies and membership organizations reduce or mitigate risk – regardless of their size and business type. Often their project teams collaborate and discuss methods for improving their risk status but have proven to be flawed. The most common flaw that sets them back is their goal to have all risk plans drive their risk probability and impact to zero, in which case it would not be a risk.

Risk_RegisterStandard risk responses include Avoidance, Mitigation, Transference, and Acceptance (passive/active). At Merit, we developed a reporting process that would show that the risk factors were decreasing as the project progressed. Supplemented with suitable risk responses, the true reduction of risk probability occurs over time.

The added value that we incorporated into the risk management process was two-fold. First, because of the desire to drive the risk to as low as possible, the use of multiple risk responses could be utilized. The second process improvement would be not only to subsequently reassess the risk, but also to re-evaluate the risk probability and impact matrix after the implementation of the risk response over time.

Probability_Impact_MatrixThe Probability and Impact Matrix is one of the tools that we recommend in a risk management strategy.  It is superimposed with risks that are labeled or numbered as in the above example. “Red” area risks were uniquely documented on a trending month-to-month basis such that it could be seen “driving” toward zero.

The implementation of a risk response would then “reclassify” the risk event for the next reporting period. However, the biggest impact on reducing risk is time.  Time because we are progressively refining our process as our project develops, and because the physical window (amount of time available) for a risk event is reduced.

We invite you to learn about our modified process template so you too can incorporate it into your project plans. For more information, to learn other advanced risk monitoring, reporting, and controlling techniques or to schedule a risk management training customized for your team, contact Jim Wynne at jwynne@meritcd.com or by calling (610) 225-0449.

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The Pre-Mortem Technique

During my research on how to make better decisions I came across the pre-mortem in the writings of Nobel Prize winner Daniel Kahneman. He notes in his book, Thinking, Fast and Slow (2011), that the pre-mortem technique is valuable in the decision-making process because it has two main advantages. PreMortemFirst, it overcomes “groupthink” that affects many teams once a decision appears to be made. When groupthink is in effect, the wisdom of a plan or decision is gradually suppressed and eventually come to be treated as evidence of disloyalty. The collective suppression of doubt contributes to the group’s overconfidence, which is often a tragic flaw.

Second, it unleashes the imagination of knowledgeable individuals in a much needed direction—the opposite direction of the decision. The principal advantage of the pre-mortem technique is that it legitimizes doubts and encourages everyone, even supporters of the decision, to search for possible threats not considered in the decision-making process. I immediately recognized it as an excellent technique for decision-making, risk management and general leadership.

Because this has proven to be of great value, I would like to share this excellent technique with you. The pre-mortem is easy to implement once the team reaches a decision or finalizes a course of action. Here’s what you need to do:

Step back and state the following: “Imagine that we are one year into the future. We implemented (the decision and plan) exactly as decided here today. The outcome was a total complete disaster. Take 5 to 10 minutes to write a brief history of that disaster.” If someone asks: “What do you mean by a total disaster?” Reply: “In any and every way imaginable it was a total failure.”

Then, explore all the possible reasons that the decision or plan failed. By taking this opposite approach to brainstorming the ideas, your team will likely realize that there are more points that need to be thought through before the plan is implemented.

Merit Career Development incorporates this technique into our leadership, strategic decision-making, risk management and project management classes and it is very well received.  In one recent class the participants clutched the flip charts from the group discussion. I saw this and asked what were they going to do with them? I was told that they were going to present the findings to upper management; they had never participated in such a rewarding experience.

Merit can help guide your team through various tools and techniques to optimize your team’s knowledge, skills and ability with techniques and tools such as pre-mortem and many others. Please contact Jim Wynne at jwynne@meritcd.com or call him at 610-225-0449 to schedule training to learn this and other valuable decision-making techniques.

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$4.8 Million, Highest Fines Issued by HHS to Date

ePHI breach on internetMay 2014

The Department of Health and Human Services (HHS) entered into settlements totaling $4.8 million with New York-Presbyterian Hospital (NYP) and Columbia University Medical Center (CU) for failing to implement appropriate administrative and technical safeguards to secure the ePHI of approximately 6,800 patients[i]. This is HHS’ highest financial sanction issued to date as a part of breach settlement agreements, confirming its commitment to enforce HIPAA compliance.

Breach Report, Investigation and Findings

NYP and CU received a complaint from an individual who found confidential health information (ePHI) including status, vital signs, medications, and laboratory results of a deceased relative, a former NYP patient, on the Internet. The HIPAA regulations require such ePHI be maintained in secure systems and kept confidential. In accordance with HIPAA requirements, they submitted a joint report of the complaint to HHS dated September 27, 2010 resulting in an investigation by HHS’ Office of Civil Rights (OCR).

OCR’s investigation found that NYP and CU have a joint healthcare services arrangement wherein CU faculty members work as attending physicians at NYP. To support the services, NYP and CU operate a shared data network including firewalls administered by employees of both entities with shared links to NYP patient information systems.

OCR identified the breach to have occurred when a CU physician employed to develop applications for both entities attempted to de-activate a networked server containing NYP patient ePHI. Due to a lack of technical safeguards in place on the network, the de-activation attempt resulted in NYP ePHI becoming accessible to internet search engines.

OCR found that neither NYP nor CU could demonstrate that its servers were secure or contained software protections prior to the breach. OCR found an additional lack of administrative safeguards, specifically that neither entity had conducted a risk analysis to identify all systems with access to NYP’s ePHI or had a risk management plan in place to address potential hazards or threats to the security of its ePHI.

Finally, OCR found that NYP failed to implement its own technical safeguards including procedures for authorizing access to its databases and information access management processes. In addition to the financial sanctions, NYP and CU agreed to a corrective action plan requiring implementation of the administrative and technical safeguards and to monitor compliance with regular reports back to HHS.

Increased HHS Enforcement of HIPAA Compliance

This action gives notice to Covered Entities and Business Associates that HHS has heightened its enforcement efforts since the enactment of HITECH and the HIPAA Omnibus Rule.

It is imperative that a healthcare organization ensure that its workforce understands the privacy and security regulations, not just completes rote training programs, and recognizes the impact that non-compliance—from even one employee—can have on an organization.

The mandated HIPAA safeguards must be in place to identify risks and threats to ePHI and patient information systems, including insider threats from its own workforce. The safeguards must be regularly monitored through risk analysis as a part of a comprehensive risk management program.

Click here to learn how to mitigate these risks with an organization-wide risk analysis.


[i] See http://www.hhs.gov/news/press/2014pres/05/20140507b.html


© 2014 Merit Career Development. All rights reserved. For more information, please contact Jim Wynne at jwynne@MeritCD.com.

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Risk Analysis: Prepare Now or Pay Later

MeetingManaging risk to confidential patient health information (PHI) is not only a critical component of healthcare today; it is also a mandate of the HIPAA Omnibus Rule (HIPAA).

HIPAA mandates that organizations conduct a regular risk analysis to identify and mitigate risks to patient records and the PHI they manage in their electronic health records systems (EHRs). Failure to secure PHI and mitigate the threats and vulnerabilities identified in a risk analysis can result in investigations by the Department of Health and Human Services (HHS) and other federal and state regulatory agencies. These agencies have authority to impose millions of dollars in penalties and fines as well as extended regulatory oversight, and can do so simultaneously for the same offense.

The Situation

According to the HIPAA Omnibus Rule (HIPAA Omnibus Rule) [1], Failing to protect patient records and prevent disclosure of PHI can damage patients’ financial status, job prospects, and reputation, far exceeding the impact of their medical conditions.

The HIPAA Omnibus Rule requires Covered Entities and Business Associates to conduct regular risk analyses [2] to identify and address threats and vulnerabilities to the confidentiality, integrity and availability of patient records and the PHI they manage and maintain in electronic health information systems.

Millions of dollars in penalties and fines as well as extended regulatory oversight can result from these failures, levied after investigations by the Department of Health and Human Services (HHS) and other federal and state regulatory agencies.

Nearly 30 million patient records have been reported to HHS as compromised in breaches since 2009, according to surveys conducted by healthcare IT security consultants as recently as February 2014[3]. The report states that “(i)n 2013 alone, 199 incidents of breaches of PHI were reported to HHS impacting over 7 million patient records, a 138% increase over 2012.” These statistics do not include breaches that have not been reported to HHS.

Furthermore, HIPAA requires notification of HHS and the patients whose PHI has been breached. Such notification can negatively impact patients’ confidence in as well as the reputation of the service provider. The flip side is that patients build trust in and strengthen their loyalty for their healthcare providers when their PHI is securely managed. A reputation for private and secure management of health information can also serve as a marketing tool for the provider.

In the early roll-out of HIPAA, HHS’ history of lax oversight and few consequences for non-compliance resulted in minimal implementation of the privacy and security standards. Covered Entities lacked comprehensive compliance planning, allocating responsibility over multiple departments to provide workforce training and accountability programs and taking the position that electronic health records systems (EHRs) successfully producing electronic records and bills was sufficient to demonstrate HIPAA and HITECH compliance.

Meanwhile, reports of patient complaints and breaches poured into HHS by the millions. Eighty-three per cent of all large HIPAA privacy and security breaches are the result of theft, according to surveys from HHS sources reported by Healthcare IT News. More specifically, the surveys report that approximately 22% of breaches since 2009 were due to unauthorized access to PHI, 35% were attributed to theft or loss of unencrypted devices containing PHI, and 6% were due to hacking[1].

The results of HITECH’s pilot audit program demonstrated that covered entities lacked understanding of the actual privacy and security standards as well as grounding in the specific implementation requirements the standards impose on internal systems, operations and resources necessary to meet HIPAA compliance requirements.

The HIPAA Omnibus Rule amendments confirm that anything short of a comprehensive, documented and implemented risk management process will not meet HIPAA compliance requirements today. It also requires that risk management program incorporate the results of a comprehensive complaint and breach investigation procedure focused on identifying and addressing workforce errors and patient complaints within the organization. Finally, the HIPAA Omnibus Rule extends these compliance requirements to Business Associates performing services or functions for or on behalf of covered entities.

The Solution

Risk management begins with an organization-wide risk analysis– i.e. an accurate and thorough assessment and mapping out of actual use and disclosure procedures in place for PHI in all formats throughout the whole organization. This includes satellite and multi-state offices, subsidiaries, patient portals, remote access to its PHI/ePHI, and PHI/ePHI disclosed to its Business Associates.

A key component of the assessment involves identifying and planning for mitigation of reasonably anticipated human, natural and environmental threats and vulnerabilities to the organization’s internal and external processes and systems. To be most effective, a risk analysis should be conducted regularly and at key intervals when changes, upgrades and/or mergers take place. The findings from the risk analysis should be incorporated into a document comprehensive and regularly updated risk management strategy for the organization. This documentation is what the OCR will likely request during investigations or audits to evaluate the organization’s compliance efforts.

The next round of OCR audits is scheduled to begin in October 2014. Covered Entities’ and Business Associates’ compliance with the HIPAA security standard’s risk analysis and risk management standard is in the OCR’s cross hairs. Failure to take affirmative steps towards compliance before the OCR comes a’knocking can add additional sanctions for willful neglect to corrective action plans and/or settlement agreements.

Whether the OCR is knocking on your door or not, the private and secure management of the Covered Entity’s or Business Associate’s health information is a critical aspect of quality healthcare services today. Leaders in the industry have this as a critical core value for their organizations, making compliance with the HIPAA Omnibus Rule just par for the course. The availability of secure and reliable healthcare information and data to support quality treatment and services requires the practice of good IT governance and due diligence[2].

Click here to learn how to mitigate these risks with an organization-wide risk analysis.


[1] The Health Insurance Portability and Accountability Act of 1996 (HIPAA) defined privacy and security standards for management of protected health information (PHI) in all formats, including oral, paper and electronic (ePHI). HIPAA was amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) which incorporated provisions of the Genetic Information Non-discrimination Act of 2008 (GINA). HITECH, among other provisions, addressed gaps in HIPAA, expanded categories of Business Associates and pulled Business Associates into the regulatory authority of the Department of Health and Human Services (HHS) and other federal and state agencies, and increased sanctions for non-compliance with HIPAA introducing a new punitive sanction for willful neglect. HITECH focuses on ePHI only and provides incentive payments for meaningful use of electronic health records systems (EHRs). HITECH’s ultimate goal is to develop a national network of health information and data which will drive efficiencies and improve the administration of healthcare in the US. The final HIPAA Omnibus Rule of 2013 (HIPAA Omnibus Rule) is HHS’ final rulemaking focused on strengthening the privacy and security provisions for PHI originally defined by HIPAA.

[2] See 45 CFR subsections 164.530 (c) [Privacy Standard] and 164.308(a)(1)(ii)(A) [Security Standard]

[3] See Redspin Report on the “State of Healthcare IT Security” (February 5, 2014) at www.redspin.com/redspin-reports-state-healthcare-security-130000284.html.

[4]   See HIPAA Data Breaches Climb 138% atHealthcare IT News (February 6, 2014) www.healthcareitnews.com/news/hipaa-data-breaches-climb-138-percent

[5]   See In Defense of HIPAA: How Compliance Drives Innovation at algonquinstudios (April 1, 2014) http://blog.algonquinstudios.com/2014/04/01/in-defense-of-hipaa-how-compliance-drives-innovation/


© 2014 Merit Career Development. All rights reserved. For more information, please contact Jim Wynne at jwynne@MeritCD.com.

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