RE: Assessment 2 – Risk Financing Patient Safety Issue Rochester General Hospital (RGH), a part of Rochester Regional Health, has been recognized for its quality healthcare services, earning Magnet status for excellence. However, to sustain its progress and achieve organizational goals, addressing the high rate of medication errors through risk financing is crucial. These errors not only compromise patient safety but also present significant financial risks to RGH. An evaluation of RGH’s spring 2021 hospital grade highlights the severity of this issue. The performance in the medication administration domain is particularly concerning, as detailed below (Hospital Safety Grade, 2021): Metric Score Best Hospital Score 100 RGH’s Score 45 Worst Hospital Score 5 Patient Safety Risk and Key Performance Indicators Medication errors are a leading cause of patient harm and financial loss in healthcare facilities worldwide (Haytham, 2016). Defined as any preventable event that may cause inappropriate medication use or patient harm under healthcare professional control (AMCP, 2019), these errors can occur during ordering, transcribing, dispensing, administering, or monitoring stages (Durham, 2016). Given the dynamic nature of the healthcare industry, with its evolving regulations, policies, technologies, and guidelines, medication errors pose both clinical and financial risks to RGH. Risk financing is essential for identifying the potential costs of these risks and assessing the organization’s ability to manage them (Rhinehart, 2021). Research indicates that medication errors cost the U.S. healthcare system approximately $3 billion annually (AMCP, 2019). To address this, RGH’s risk management team will employ key performance indicators (KPIs) and performance dashboards to monitor, assess, and mitigate risks associated with medication administration. The KPIs include: KPI Description Number of medications prescribed using CPOE Tracking electronic prescription usage Percentage of patients identified by two identifiers Ensuring patient verification accuracy Number of adverse/sentinel events due to medication errors Monitoring serious medication-related incidents Incident reporting Collecting data on all medication errors Strategies to Identify Risk Financing Issues Risk financing involves assessing RGH’s financial capacity and willingness to manage risks while aligning with the organization’s strategic values (Harvard University, n.d.). Key strategies include identifying, accepting, and managing risks (Indeed Editorial Team, 2020). Identifying risks involves examining processes or events that can harm patients and cause financial loss. For example, medication errors can result in extended hospital stays, increased resource use, decreased reimbursement, and financial losses (Chen, 2017). Managing risks entails gathering data, reviewing information, and developing strategies to reduce the occurrence of these risks (NEJM Catalyst, 2018). Benchmarking can then be used to measure progress in risk mitigation and financial performance (Institute for Safe Medication Practices, 2005). Recommendations for Risk Financing To reduce medication errors at RGH, the following strategies are recommended: Computerized Physician Order Entry (CPOE) with Clinical Decision Support (CDS) Bar Code Medication Administration (BCMA) System Confidential Incident Reporting Implementing technologies like CPOE and CDS has been shown to reduce medication error rates by 55% (Durham, 2016). These systems guide healthcare professionals on drug dosages, routes, and frequencies, and provide alerts for allergies or interactions (Shah, 2016). The BCMA system ensures the five rights of medication administration (right patient, dose, drug, time, and route) and generates real-time alerts (Shah, 2016). Confidential incident reporting will help gather data on medication errors, enabling the development of strategies to improve patient safety. A safety culture will be fostered, encouraging error reporting without fear of repercussions, thereby providing valuable insights for risk managers (Rodziewicz, 2021). Legal and Ethical Financial Risk Obligations As an accountable care organization (ACO), RGH must manage legal and financial risks effectively to remain profitable and successful (NAACOS, n.d.; LaPointe, 2016). ACOs aim to provide coordinated, high-quality care while reducing costs and preventing medical errors (CMS, 2021). Compliance with CMS policies, which reduce or withhold reimbursement for preventable errors, is essential (National Conference of State Legislatures, n.d.). By adhering to safe medication practices and The Joint Commission (TJC) guidelines, RGH can improve patient safety and maximize reimbursement from CMS. References AMCP. (2019, July 18). Medication Errors. Retrieved from Academy of Managed Care Pharmacy: https://www.amcp.org/about/managed-care-pharmacy-101/concepts-managed-care-pharmacy/
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