With the rapid pace of change continuing to transform the healthcare industry, healthcare leaders are adapting to changes in workforce and staffing, technology integration, financing and costs.

Healthcare leaders appear to be taking these challenges head-on. According to Deloitte, 60% of industry leaders hold a favorable outlook for the healthcare industry in 2025.

While this is encouraging news, healthcare leaders must continually focus on risks that remain prevalent throughout the industry.

According to a recent report published by Proviti and NC State University, healthcare industry executives indicated the following as the top industry risks in 2025:

1. Cyber threats
2. Ability to attract, develop and retain top talent; manage shifts in labor expectations; and address succession challenges
3. Talent and labor availability
4. Increases in labor costs
5. Third-party risks

What Is Healthcare Risk Management?

Managing risks in healthcare means analyzing practices and processes to identify risk factors. Once risks are identified, steps can be taken through a risk management program to address and mitigate these risks.

In the healthcare industry, risks may harm patients, the healthcare organization or those working in the healthcare organization. Traditionally, risk management in healthcare has focused on patient safety and the reduction of medical errors to protect against liability. However, with the increasing reliance on technology and the dynamic political environment, cybersecurity, regulation and reimbursement have expanded the risk surface.

Healthcare Risk Management Procedures

As a part of an overall risk management strategy, there are several key steps to take to assess and manage risks.

Identify Risks

Although identifying risks is challenging, it is important to cast a wide net throughout your organization to properly uncover all potential risks. Consider taking these actions to identify risk:

• Engage all staff, patients and payers: Talk with people to better understand the potential risks they encounter. Ask questions that allow you to better understand adverse incidents that may happen, the probability of incidents occurring and potential outcomes.
• Analyze reports and data: Review industry reports and data to better understand threats that the healthcare industry currently faces. These reports may also provide insights as to how other industry leaders are mitigating specific risks.
• Track patient activity: Track the patient experience from admission to discharge to better understand patient-specific risk. Once the patient is discharged, consider reviewing other activities, such as any expired prescriptions, missed appointments and test results.

Analyze Risks

Once risks are identified, properly assess all risks to understand the potential impact on your organization and patients. Understand the likelihood of occurrence, as well as the potential impact. Ask questions such as: How can you reduce the likelihood of the risk occurring? What is the best way to mitigate the risk? What are the potential consequences should the risk occur?

Consider prioritizing all identified risks with a ranking and a score based on their likelihood and impact. Rankings typically take into account the probability of occurrence (from low to high), as well as the potential impact (from low to high). Performing this analysis will enable the organization to apply the proper resources to mitigate and manage all risks.

Manage Risks

Once risks have been analyzed and evaluated, develop a risk management plan. A risk management plan is the organization’s framework that describes how risks are identified, managed and mitigated. It describes how the organization continuously reduces exposure to risks through initiatives and projects that can include risk reduction, risk prevention, risk avoidance, risk segregation or risk transfer.

The risk management plan can also identify people who will play key roles in the risk management program, such as the risk manager and those involved in committees to provide leadership steering or specialized guidance on topics such as cybersecurity or patient safety.

Risk Reporting

An important part of the organization’s risk management strategy is reporting key data to show increasing or decreasing risk exposure, as well as proper communication with various stakeholders. Consider including in the organization’s risk management plan several types of reporting:

• The progress of steps (e.g., projects, controls, process implementation) taken to mitigate specific identified risks
• Progress made toward risk mitigation (e.g., percentage of risk decrease or data that indicates meeting compliance or regulatory requirements)
• Specific events or incidents that may trigger additional risk mitigation activities

Communication

Communicating with staff, leadership and patients requires different messaging. While the content and format may vary, ensure that all communication is clear, collaborative and timely.

• Staff and Internal Messaging: Set up various channels, such as regular emails about the risk management program, alerts if certain thresholds are reached, and reports to keep all staff updated. Always include the basics —don't assume that people know about risk management or the organizational program. Lastly, encourage feedback and create a reporting mechanism where staff can speak up if needed.
• Leadership: Engage leadership regularly and often. Emphasize the importance of risk management in achieving quality patient care, reducing risk, and meeting compliance requirements. Consider creating structured reports that link risk reduction to organizational goals. Include high-level strategies that are being used right now to mitigate the most impactful risks.
• Patients: Communicate risks to patients in understandable terms to better support their decision-making. To build trust, ensure that there are ways to openly discuss potential risks in treatments or procedures.

Healthcare Risk Management Standards

The American Society for Healthcare Risk Management has an enterprise risk management framework that, when applied, can help those in your organization to make better risk management decisions. The framework consists of eight domains:

• Operational: Operational risks result from inadequate people, processes or systems that can impact healthcare operations. Examples include failure in a data backup system, credentialing, staffing and deviation from practice.
• Clinical/Patient Safety: These are risks related to the delivery of care to patients, residents in care homes and patients in other settings. These can include medication errors, surgical mistakes, hospital-acquired conditions or injuries caused by unsafe conditions.
• Strategic: Strategic risks are associated with the focus and direction of the organization. Because change is coming so quickly to healthcare organizations, failing to properly implement technology, meet regulatory requirements, or meet patient priorities can increase risk.
• Financial: Risks related to the financial stability of the organization make up this category. These may include risks from malpractice lawsuits, regulatory fines, fraud, insurance or unpaid bills.
• Human Capital: These relate to risks associated with the workforce. Examples include risks related to retention, absenteeism, on-the-job injuries, as well as lack of training and policies related to sexual harassment and workplace violence.
• Legal/Regulatory: These are risks associated with the failure of the organization to identify, monitor and comply with local, state and federal statutes and mandates. Examples include risks associated with licensing, accreditation and lack of compliance.
• Technology: This domain applies to software, data and the underlying systems. These risks have only increased due to the reliance on technology and can relate to errors regarding electronic health records, billing and payment systems, and cybersecurity.
• Hazard: These are risks related to natural disasters and business interruptions caused by facility issues, such as construction, renovation and security.

Healthcare Risk Management Best Practices

Whether your organization is running a robust risk management program, or you are starting one for the first time, consider a few industry best practices.

Identifying and Prioritizing Risks

While some members of your organization may rely on intuition to identify and prioritize risks, consider leveraging a risk matrix. A risk matrix is a healthcare risk management tool that visually depicts the likelihood of a risk occurring, as well as its potential impact. All risk matrices have two axes; typically, the “y” axes measures likelihood, while the “x” axes measures impact.

The matrix presents various risks as a chart color-coded by severity, with high risks in red, moderate risks in yellow and low risks in green. Make sure to determine what makes a risk likely (e.g., percent chance of occurrence) as well as what makes a risk impactful (e.g., a loss of specific dollar amounts).

To enable the best use of the risk matrix, present all risks in a single view so senior leadership can make decisions based on the organization’s entire risk surface.

Create a Risk-Aware Culture

Creating a strong risk management culture will lead to greater employee satisfaction and improved patient outcomes. Below are some tips to enable a strong culture of risk awareness:

• Promote Proactive Leadership: Encourage leaders to participate in programs, activities and discussions that emphasize the importance of risk awareness in achieving organizational goals.
• Provide Training: Invest in and promote training that equips employees with the skills to identify, assess and properly respond to risks. Invite employees to participate in risk assessments so everyone understands their role in risk management.
• Implement a “No Blame” Culture: Create an environment where staff feels comfortable reporting activities and events that could lead to greater risk. This approach enables learning and continuous improvement.
• Utilize Healthcare Risk Management Templates and Tools: Consider reviewing healthcare risk management tools provided by the American Society for Healthcare Risk Management and those provided by KnowledgeLeader, such as the Healthcare Management Planning Risk Assessment Questionnaire and the Top Compliance Priorities for Healthcare Organizations in 2025.

Learn more about healthcare risk management by exploring these related resources on KnowledgeLeader:

• Topic: Healthcare and Pharmaceutical Industry
• Healthcare Dependents Audit Work Program
• Patient Admission Policy