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Risk Data Integration Elevates Healthcare ERM

A truly integrated healthcare risk management platform will improve provider organization efforts to practice effective Enterprise Risk Management (ERM).
By: | April 18, 2017 • 6 min read

Healthcare risk management starts with patient safety. No other industry holds responsibility over people’s quality of life quite like healthcare, where mistakes hold dire consequences for patients, families, providers and organizations.

But there are many more risks to consider beyond this critical area.

Governance and compliance risk, emergency preparedness and business continuity, vendor and supply chain risk and strategic risks don’t exist in isolation. They are all interconnected, and many can impact patient safety.

“Patient safety is the traditional entry point for risk management in healthcare,” said Jay Lechtman, Senior Director, Market Development & Strategy, Riskonnect, “but you also need to look at the whole picture to understand how your risks are connected.”

“Just as healthcare provider organizations adopted lean six sigma from manufacturing, safety checklists from aviation, and high-reliability organizations from nuclear energy and defense, they are now adopting enterprise risk management from other industries — such as financial services — as a best practice.”

But ERM doesn’t necessarily place risks in context, and can still be fragmented. To ensure a more holistic approach, risk managers need to practice it as integrated risk management.

What is Integrated Risk Management?

Senior Director, Market Development & Strategy

Integrated risk management calls for risk managers to see the connections between different areas of risk and find solutions that mitigate the total exposure.

In a primer for member boards and trustees, the American Society of Healthcare Risk Management (ASHRM) explains that organizations can start with an enterprise risk management approach and then make comparisons among its risks to see how they interact with one another and what cumulative impact they have on the organization.

“That elevated view of risk is integrated risk management,” Lechtman said. AHSRM has been making efforts since 2014 to educate healthcare organizations on integrated risk management and provide tools to develop the approach.

And most if not all of these efforts come back to improving patient safety.

Pharmaceutical supply chain risk, for example, has often been involved with potentially dangerous medication errors.

“Medication errors are a commonly reported patient safety event, and drug shortages have frequently been identified as a causal or contributory factor in these errors,” Lechtman said. “It’s not a surprising fact. Clinicians unfamiliar with new drugs and their prescription and administration protocols are more likely to make mistakes.”

Yet, identifying drug shortages as a factor in isolation requires lengthy investigations, root cause analyses and enough data aggregation to see clear trends.  Somewhere there is a disconnect between supply chain risk management and downstream clinical risk management. Fragmented ERM fails to take into account how vendor risks can directly impact patients.

Now, external resources – like the FDA’s Drug Shortages Database – help healthcare providers monitor and manage this issue, but Lechtman argues that effective integrated risk management could have helped the solve the problem internally.

“In integrated risk management, the pharmacy supply chain risk could be identified and mitigated much faster, with protocols put in place to train staff on use of identified alternative medications to reduce unfamiliarity and error,” Lechtman said.

Crisis management and business continuity offer another example. New Conditions of Participation for Medicare that go into effect later this year will require healthcare providers to improve emergency preparedness, which includes having business continuity plans. Patient safety is again a critical factor in planning for transportation and use of backup supplies and facilities in the event of an emergency.

Nearly all hospitals and health systems report trying to implement ERM at some level of their organization. But, even if they want to integrate it, they have lacked the technology to enable the vision.

“Legacy vendors focus on patient safety, claims and risk management specifically designed for healthcare. They don’t support broader risk management, governance and compliance risk that healthcare organizations sorely need,” he said.

Achieving True Integration

Other industries, where patient safety isn’t a consideration, have been working towards an integrated approach for years. The financial services sector, for example, has been implementing Governance Risk and Compliance (GRC) solutions for much longer due to its exposure to regulatory and compliance risk. The healthcare industry’s late arrival to ERM gives it a unique opportunity to learn from others’ mistakes and “leapfrog” over other sectors, Lechtman said.

“Just as much of the developed world skipped building expensive wired communications infrastructure in favor of cell phones, healthcare has the opportunity to leapfrog into true integrated risk management and avoid the pitfalls of a fragmented, siloed ERM approach,” he said.

However, “it’s hard to succeed in integrated risk management when information systems can’t handle it,” Lechtman said.

The ideal integrated risk management solutions for healthcare need to excel at helping provider organizations identify and manage their unique hazard risks — like patient safety — while seamlessly scaling to other insurable and strategic risks types that healthcare shares with other industries. And, of course, they need to be able to secure sensitive healthcare data and support healthcare privacy compliance.

Seeing is Believing

Riskonnect’s Integrated Risk Management Solutions™ check all the boxes. Scalable on a single platform, the system can handle everything from patient safety, patient relations, claims and litigation management, peer review, accreditation and HIPAA compliance, employee safety and health, governance risk, reputation risk, reimbursement risk, vendor and supply chain risk, business continuity management and strategic risk.

“We’ve taken lessons from other industries, and we’ve incorporated that into our healthcare approach so that, instead of providing another limited point solution, we can do everything for healthcare risk and do it well,” Lechtman said.

Riskonnect backs up its technology with a combination of clinical healthcare experience and risk management expertise is that is necessary for risk managers to draw the connections between patient safety and other risk areas.

“If you can make the connection from other risk areas back to patient safety, you can improve that critical risk area faster and more effectively. “Limited and siloed patient safety systems just can’t do that.”

Riskonnect’s Integrated Risk Management Solutions™ can house and allow access to data and workflows connected to all risks. The solutions provide all the functions that a risk manager or claims professional might need, from notifications to determination of compensability through to follow-ups, and everything in between.

The description alone is compelling, but nothing compares to actually experiencing everything the system can do on a day-to-day basis.

“Seeing really is believing,” said Lechtman. “People are blown away when they see what true integrated risk management can accomplish.”

For more information on Riskonnect Healthcare, visit: https://riskonnect.com/integrated-risk-management-solutions/healthcare/

For more information on Riskonnect Integrated Risk Management Solutions, visit: https://riskonnect.com/integrated-risk-management-solutions/

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Riskonnect. The editorial staff of Risk & Insurance had no role in its preparation.




Riskonnect is the only global provider of Integrated Risk Management technology solutions. Built on the world’s leading cloud platform, Riskonnect finally allows you to break down the silos and unite your entire organization.

Risk Report: Entertainment

On With the Show

Entertainment companies are attractive and vulnerable targets for cyber criminals.
By: | December 14, 2017 • 7 min read

Recent hacks on the likes of Sony, HBO and Netflix highlight the vulnerability entertainment companies have to cyber attack. The threat can take many forms, from the destruction or early release of stolen content to the sabotage of broadcast, production or streaming feeds.

Brian Taliaferro, entertainment and hospitality specialist, JLT Specialty USA

“Cyber attacks are becoming the biggest emerging threat for entertainment companies, bringing risk to reputations, bottom lines and the product itself,” said Brian Taliaferro, entertainment and hospitality specialist, JLT Specialty USA.

For most entertainment firms, intellectual property (IP) is the crown jewel that must be protected at all costs, though risk profiles vary by sub-sector. Maintaining an uninterrupted service may be the biggest single concern for live broadcasters and online streaming providers, for example.

In the case of Sony, North Korea was allegedly behind the leak of stolen private information in 2014 in response to a film casting leader Kim Jong Un in what it considered an unfavorable light.

This year, Netflix and HBO both faced pre-broadcast leaks of popular TV series, and Netflix last year also had its systems interrupted by a hack.

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Online video game platforms are also ripe for attack, with Steam admitting that 77,000 of its gamer accounts are hacked every month.

The list goes on and will only get more extensive over time.

Regardless of the platform, any cyber attack that prevents companies from producing or distributing content as planned can have huge financial implications, particularly when it comes to major releases and marquee content, which can make or break a financial year.

“People and culture are the biggest challenges but also the keys to success.” — David Legassick, head of life science, technology and cyber, CNA Hardy

The bottom line, said David Legassick, head of life science, technology and cyber, CNA Hardy, is that these firms have a combination of both assets and business models that are inherently open to attack.

“Vulnerabilities exist at every point in the supply chain because it’s all tech-dependent,” he said, adding that projects often run on public schedules, allowing criminals to time their attacks to maximize impact.

“The combination of IP, revenue and reputation risk make entertainment a hot sector for cyber criminals.”

Touch Point Vulnerabilities

Film, TV, literary and music projects invariably involve numerous collaborators and third-party vendors at every stage, from development to distribution. This creates multiple touchpoints through which hackers could gain access to materials or systems.

According to Kyle Bryant, regional cyber manager, Europe, for Chubb, there is nothing unique about the type of attack media companies suffer — usually non-targeted ransomware attacks with a demand built in.

“However, once inside, the hackers often have a goldmine to exploit,” he said.

He added targeted attacks can be more damaging, however. Some sophisticated types of ransomware attack, for example, are tailored to detect certain file types to extract or destroy.

“NotPetya was designed to be non-recoverable. For a media company, it could be critical if intellectual property is destroyed.”

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As entertainment companies have large consumer bases, they are also attractive targets for ideological attackers wishing to spread messages by hijacking websites and other media, he added.

They also have vast quantities of personal information on cast and crew, including celebrities, which may also have monetary value for hackers.

“It is essential to identify the most critical information assets and then put a value on them. After that, it is all about putting protection in place that matches the level of concern,” Bryant advised.

As with any cyber risk, humans are almost always the biggest point of vulnerability, so training staff to identify risks such as suspicious messages and phishing scams, as well as security and crisis response protocols, is essential. Sources also agree it is vital for entertainment companies to give responsibility for cyber security to a C-suite executive.

“People and culture are the biggest challenges but also the keys to success,” said Legassick.

“Managing the cyber threat is not a job that can just be left to the IT team. It must come from the top and pervade every aspect of how a company works.”

David Legassick, head of life science, technology and cyber, CNA Hardy

Joe DePaul, head of cyber, North America, Willis Towers Watson, suggested entertainment companies adopt a “holistic, integrated approach to cyber risk management,” which includes clearly defining processes and conducting background checks on the cyber security of any third party that touches the IP.

This includes establishing that the third parties understand the importance of the media they are handling and have appropriate physical and non-physical security at least equal to the IP owner in place. These requirements should also be written into contracts with vendors, he added.

“The touchpoints in creating content used to be much more open and collaborative, but following the events of the last few years, entertainment firms have rapidly introduced cyber and physical security to create a more secure environment,” said Ryan Griffin, cyber specialist, JLT Specialty USA.

“These companies are dealing with all the issues large data aggregators have dealt with for years. Some use secure third-party vendors, while others build their own infrastructure. Those who do business securely and avoid leaks can gain an advantage over their competitors.”

Quantification Elusive

If IP is leaked or destroyed, there is little that can be done to reverse the damage. Insurance can cushion the financial blow, though full recovery is very difficult to achieve in the entertainment space, as quantifying the financial impact is so speculative.

As Bill Boeck, insurance and claims counsel, Lockton, pointed out, there are only “a handful of underwriters in the world that would even consider writing this risk,” and sources agreed that even entertainment firms themselves struggle to put a monetary value on this type of exposure.

“The actual value of the IP taken isn’t generally going to be covered unless you have negotiated a bespoke policy,” said Boeck.

“If you’re in season five of a series with a track record and associated income stream, that is much easier, but putting a value on a new script, series or novel is difficult.”

Companies for whom live feeds or streaming are the primary source of revenue may find it easier to recoup losses. Determining the cost of a hack of that sort of service is a more easily quantifiable business interruption loss based on minutes, hours, ad dollars and subscription fees.

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Brokers and insurers agree that while the cyber insurance market has not to date developed specific entertainment products, underwriters are open for negotiation when it comes to covering IP. The ball is therefore in the insured’s court to bring the most accurate projections to the table.

“Clients can get out of the insurance market what they bring to the equation. If you identify your concerns and what you want to get from insurance, the market will respond,” said Bryant.And according to Griffin, entertainment companies are working with their brokers to improve forecasts for the impact of interruptions and IP hacks and to proactively agree to terms with underwriters in advance.

However, Legassick noted that many entertainment firms still add cyber extensions to their standard property policies to cover non-physical damage business interruption, and many may not have the extent of coverage they need.

Crisis Response

Having a well-planned and practiced crisis response plan is critical to minimizing financial and reputational costs. This should involve the input of experienced, specialist third parties, as well as numerous internal departments.

Ryan Griffin, cyber specialist, JLT Specialty USA

“The more business operation leaders can get involved the better,” said Griffin.

Given the entertainment industry’s highly public nature, “it is critically important that the victim of a hack brings in a PR firm to communicate statements both outside and within the organization,” said Boeck, while DePaul added that given that most cyber attacks are not detected for 200-plus days, bringing in a forensic investigator to determine what happened is also essential.

Indeed, said Griffin, knowing who perpetrated the attack could help bring the event to a swifter and cheaper conclusion.

“Is it a nation state upset about the way it’s been portrayed or criminals after a quick buck? Understanding your enemy’s motivation is important in mitigating the damage.”

Some hackers, he noted, have in the past lived up to their word and released encryption keys to unlock stolen data if ransoms are paid. Inevitably, entertainment firms won’t always get so lucky.

Given the potentially catastrophic stakes, it is little surprise these firms are now waking up to the need for robust crisis plans and Fort Knox-level security for valuable projects going forward. &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]