How to make a better argument for returns on compliance investments. Jeffrey F. Driver, JD, MBA, ARM, DFASHRM CEO, The Risk Authority, Stanford

Transcription

1 Introducing Value-Driven RM How to make a better argument for returns on compliance investments Jeffrey F. Driver, JD, MBA, ARM, DFASHRM CEO, The Risk Authority, Stanford The Risk Authority - Stanford DART Stanford Risk Assessments PEARL Clinical Coding Risk in Residency Program VDERM Consulting Safe Patient Handling Physician Peer Support Loss Prevention Strategies Risk Education 1

2 Learning Objectives Discover a total value methodology for assessing risk investments Explain the upside of risk Describe how to evolve from traditional RM to ERM to VDERM Explain how decision science and design thinking can take compliance mitigation programs to the next level Context We are all risk managers Competing priorities Upside of Risk We need a total value approach 2

3 Agenda 1. What is VDERM? RM -> ERM -> VDERM 2. How does it work? Tools & Processes 3. Case Study Identify, Assess, Evaluate, Mitigate, Monitor What is VDERM? 3

4 A Total Value Mindset Downside Risk Upside Risk Total Risk Program Value Value Protection Value Creation The Goal Increase Value Total Stakeholder Value Reduce Risk 4

5 Total Value Tools Downside only Total program value (Downside + Upside) Value-Driven Enterprise Risk Management Builds on the core of Traditional & Enterprise Risk Management Uses data and decision science in the risk process to create risk intelligence. 5

6 How Does VDERM Work? VDERM Tool Kit ERM ISO Decision Science Design Thinking 6

7 ERM ISO

8 Decision Science Alternatives Information & Beliefs Logic & Reasoning Outcome Values & Preferences Dialogue Decision Process 8

9 Decision Quality Framework Clear Values Alternatives Helpful Frame Useful Information Commitment to Action Reasoning Design Thinking A human-centered, iterative process for innovation and problem solving that balances both analytical and creative thinking. 9

10 Case Study: Stark Law Governs physician referrals and payments for those practices. Identify Figure out what types of future events might prevent or slow the achievement of objectives or enhance the prospects of success. Value Protected & Value Created 10

11 Identify: The Model Methodology Prioritizes to focus resources Focuses on what needs to be fixed Identifies who is involved Supports resourcing solutions Data Mining Data Insight 11

12 Risk Register Decision Hierarchy Givens that have already been decided Decisions that should be the focus of analysis Program particulars that can be decided later Policy Decisions Focus on Decisions Tactical Decisions 12

13 Assess Determine which risks are most critical and how individual risks are related to each other. Value Protected & Value Created Heat Map Impact Assess Identify Likelihood 13

14 Value Map Create High Quality Alternatives 14

15 Design Process Inspire Implement Ideate Case Study Alternatives for Stark Law program: Software Training Consultant Do nothing 15

16 Strategy Table Alternatives Element1 Staffing Element 3 Qualityand Cost Position Marketing Strategy Software Current 1 FTE 2FTEs Quality and cost leadership Training Close #1 5 FTEs 0 Improved quality higher costs Sell quality and influence market growth Consultant DoNothing Current Value added specialties only Minimal quality improvements Sell Quality Current Current Evaluate Decide which risks need to be addressed and evaluate and compare outcomes. Value Protected & Value Created 16

17 Modeling & Analytics Evaluation 17

18 Waterfall : CFO Diagram Decision Quality 3. Information 4. Values 2. Alternatives Decision Quality 0% 100% 5. Reasoning 1. Frame 6. Commitment to action 18

19 Mitigate Deploy strategy to reduce risks at the top of your list as well as steps to increase potential benefits. Value Protected & Value Created Prototype & Launch 19

20 Advanced Project Management Monitor and React Determine if your risk management process has been effective. Monitor the timeliness and effectiveness of the various steps to reduce risks and boost gains. Value Protected & Value Created 20

21 Evaluation Iteration Inspiration Ideation Implementation 21

22 SHC Experience The graph shows Stanford loss rate vs Aon HPL Benchmark Teaching Hospitals Loss rate. Red represents the total loss rate for Stanford. Blue represents the total loss rate for Aon HPL Benchmark. Loss Rate = Ultimate loss at $15M divided by Occupied Bed Equivalents More information 22

23 Summary VDERM is a total value methodology for assessing risk investments VDERM builds upon traditional RM and ERM VDERM enables you to capture the upside of risk while simultaneously managing enterprise-wide downside risk Decision science and design thinking powers the evolution from traditional RM to VDERM Questions 23