Risk assessments and heat maps remain central components in most enterprise risk management (ERM) programs. Yet there is considerable debate about their effectiveness and both tools have no shortage of critics. In 2011 Howard Sklar, a Forbes contributor, outlined one of the most popular criticisms regarding companies that viewed risk assessments as a document instead of a risk management process. He noted, “Companies that fail in this way are often trying to check the risk-assessment box on their program. That’s fine, as far as it goes. At first glance, a risk assessment seems like a low-ROI effort. You put in time and potentially money, and you get back a piece of paper laying out what you already know.”
Similarly, others deride heat maps as nothing more than “colorful guesses.” Brian Priezkalns, in the not-too-subtly titled article, Why I hate Heat Maps, says “Heat maps are just a terrible terrible terrible way to understand, communicate about, and decide how to respond to risks. They either mess up what you already knew, or they hide the fact you are too ignorant to make a rational decision. Everything that can be done with heat maps would be done better with actual numbers.”
If these tools have such fierce critics, then why are they still central to most ERM programs? In this article, we’ll examine what drives the limitations, and the key missing ingredient that turns them into powerful assets. … read more
Origami Risk has been named one of Inc. magazine’s Best Workplaces for 2019, the magazine’s fourth annual ranking in the fast-growing private company sector. In gaining this recognition for the second consecutive year, Origami Risk now has earned 19 workplace awards in recent years. The honors showcase its commitment to hire and retain the insurance industry’s top talent to provide the highest level of service to its customers.
Hitting newsstands in the June 2019 issue, and as part of a prominent Inc.com feature, the list is the result of a wide-ranging and comprehensive measurement of private American companies that have created exceptional workplaces through vibrant cultures, deep employee engagement, and stellar benefits. Collecting data on nearly 2,000 submissions, Inc. singled out 346 finalists.
Each nominated company took part in an employee survey, conducted by Omaha’s Quantum Workplace, on topics including trust, management effectiveness, perks, and confidence in the future. Inc. gathered, analyzed, and audited the data. They then ranked all the employers using a composite score of survey results. This year, 74.2 percent of surveyed employees were engaged by their work—besting last year’s 72.1 percent.
The strongest engagement scores came from companies that prioritize the most human elements of work. These companies are leading the way in employee recognition, performance management, and diversity. It’s a different playbook from a decade ago, when too many firms used the same template: free food, open work environments, and artifacts of “fun.”
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In November 2018, Baylor St. Luke’s Medical Center in Houston made two medical errors, the second of which lead to the death of a 75-year-old patient. After an investigation by the Houston Chronicle and ProPublica, the Centers for Medicare and Medicaid Services issued a report in early 2019 that outlined a pattern of blood labeling errors at the hospital. A ProPublica article on the report states:
Dr. Ashish Jha, an expert in hospital quality, reviewed the government’s findings and said it appeared St. Luke’s was struggling to meet basic care standards. The labeling mistakes, he said, seemed indicative of ‘a broader systemic problem.’… St. Luke’s appeared to miss warning signs in the months prior to the deadly mistake, according to the government report.
The “broader systemic problem” Dr. Jha mentions is, unfortunately, not unique to St. Luke’s. Many hospitals and healthcare systems face organization-wide, process-related issues, especially in a modern healthcare landscape that’s rife with change. Mergers, multiple technology platforms, and changing healthcare policies, to name just a few, contribute to widespread miscommunication and a lack of transparency. This, in turn, jeopardizes the overall quality of care within these organizations.
Hospitals can stem the scope of these issues by implementing a healthcare enterprise risk management (ERM) program. Healthcare ERM establishes a standardized framework for identifying risk across an organization, encourages cross-departmental collaboration, and shifts hospitals from a reactive clinical risk program to a proactive holistic risk management program. A straightforward process, along with the right technology the leverages healthcare analytics, can help to make this shift effective.
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In April, a global network of telescopes/telescope arrays called the Event Horizon Telescope zoomed on the galaxy M87 to create this first-ever picture of a black hole. Further analysis of the image revealed neither the whereabouts nor status of your RMIS support ticket.
When changing business requirements call for adjustments to your risk management information system (RMIS), how does your service team respond? For too many risk managers, the process looks something like this:
- Submit a support ticket.
- Send a follow-up email.
- Call and leave a message.
- Send a follow-up email (cc’ing additional RMIS provider staffers in hopes of escalation).
Trapped in this RMIS service ticket black hole, even the most basic of changes can mean weeks of waiting. Beyond testing one’s patience, delays can negatively impact risk management objectives. If you’re reading this while waiting for a response from your service team, consider switching to technology and an approach to RMIS support that puts you in control by putting your needs first.
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The number of core systems an insurance risk pool uses can have a major impact on the level of service that members receive, as well as the pool’s ability to make the best use of staff resources. Constantly jumping between multiple systems and trying to coax Word and Excel into accomplishing tasks they were never designed to handle is a recipe for performance issues. This can limit a pool’s growth and the types of services it can provide.
Activities most impacted
While the inefficiency of using a patchwork of applications to handle core business functions cuts across a wide variety of routine tasks, several activities performed by risk pool staff are particularly susceptible.
Calculating loss ratios
Assembling the information necessary to calculate loss ratios often involves building multiple spreadsheets and transferring data from several sources via copy/paste. This highly inefficient process is prone to errors. According to the ECRI Institute report, Copy/Paste: Prevalence, Problems, and Best Practices, the familiarity of the copy/paste technique explains why it is used so often. “However,” the report warns, “with several windows open, information can easily be copied into the wrong location. Secondly, copy/paste accelerates propagation of inaccurate information. The ubiquitous use of copy/paste means that, once created, an error can rapidly spread.”
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It seems as if everywhere you turn, someone’s referencing AI. “Artificial intelligence is essential for business,” states a news article. “AI is the only way forward,” insists a colleague. And the scariest of all: “If you don’t implement AI quickly, you’ll be left in your competitors’ dust.” The constant refrain of AI, AI, AI can leave you feeling like your organization has lost the race before it has even entered it.
The truth is, AI is changing the world at a remarkable pace. And, eventually, nearly every industry and business will benefit from it. “Whether you work in retail, banking, transport or the public sector, AI will be an integral part of the way you do business in the future as it has huge potential to improve decision-making, increase efficiency and power new ways of working,” states the article How to Get Your Business AI-Ready.
But that doesn’t mean AI is the best solution for your organization right now. Implementing AI takes a massive commitment in the form of time, resources, and money. It requires a critical mass of data and properly trained staff. By prematurely jumping into a high-profile AI program, you risk ignoring the valuable tools already available and stalling other strategic projects underway. Instead, a more practical approach—one that uses software scaled to your operations—will move the most important metrics now, while developing an analytics culture that will make AI more feasible down the road.
AI has become a buzzword. What exactly does it mean?
In its prolific use, the meaning of artificial intelligence has become skewed. Some have come to view it as a magical solution capable of instantly transforming business all on its own. Others equate it with automation. Neither of these is true, however. AI requires much preparation and strategy (more on that later), and where automation follows pre-programmed rules, AI involves machine learning. AI is designed to mimic human thinking by making predictions and adjusting its processes based on new data insights. In this way, AI is quite different from many previous technological revolutions, during which technology took over specific, static roles within processes.
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The Operation Varsity Blues scandal has heightened reputation management concerns across the higher education community. Seeing how quickly any college or university can suffer reputational damage, and how lasting that damage can be, underscores how valuable an institution’s reputation is, and how critical it is to safeguard it.
The book Reputation management: The key to successful public relations and corporate communication by New York University professors John Doorley and Helio Fred Garcia opens with a quote from Warren Buffet who addressed a group of Salomon Brothers managers in 1991 after the firm became mired in a high-profile trading scandal: “If you lose dollars for the firm by bad decisions, I will be very understanding. If you lose reputation for the firm, I will be ruthless.”
Although numerous surveys show that many leaders of higher education institutions place the same value on reputation as Buffet does, effectively managing these risks remains elusive. In fact, most cannot even define what reputation is.
Defining Reputational Risk
In the article How to Manage Reputation Risk, Nir Kossovsky addresses the definitional ambiguity directly. “From your boardroom and C-suite to the SEC and Office of the Comptroller of the Currency, everyone agrees reputation risk exists, yet few can describe it. However, this isn’t as difficult as it seems.” Kossovsky defines reputation as the expectation of behavior that is set by stakeholders. “Customers have expectations when they buy products or services, employees have them when they accept jobs, vendors have them when they partner, creditors and investors have them, and even regulators have them.” For colleges and universities, this extends to the communities that house them, the potential pool of students and parents considering attendance, research partners, and the other organizations that interact with them.
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Organizations often miss a crucial step in their drive to acquire and implement technology as a means to remain competitive. The ability of commercial insurance brokers to leverage data and analytics to bring in new business, write policies, and provide added value to their clients is about more than selecting the best risk management information system (RMIS). To get the most out of the investment in technology and become a digital leader, a brokerage should first assess if essential foundational elements are present.
The next-level broker
A next-level brokerage is a firm that has undergone the process of digital transformation, a term that CIO contributor Mark Edmead defines in Digital Transformation: Why its important to your organization as “the acceleration of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way.”
An anonymously attributed response to the Commercial Property/Casualty Market Index (Q4/2018) survey question, “What opportunities for commercial insurance brokers do you see?” can be also be read as a more specific description of the next-level broker. He or she is able to “maximize use of technologies and analytics to grow business and do so with reduced expenses.” Furthermore, the next-level broker has the “[i]ncreased ability to target growth in select industries via use of data and analytics.” Finally, he or she is able to “[i]dentify new ways via technology and through the use of data and analytics, to solicit, write, and service business.”
Analytics functionality is an essential component in the digital transformation into a next-level brokerage. However, the act of putting a RMIS in place (or modernizing an existing system) doesn’t mean that all expectations around analytics will automatically be met. The right mix of people and data must also be present.
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Data silos not only create obstacles to effective operations, but can also directly affect your bottom line. Listed below are five common issues associated with siloed data and ways to avoid them.
1. Creates a dependency on inefficient external reporting applications
Multiple platform architecture complicates the reporting process. While third-party reporting tools can be used to analyze data across multiple systems and produce unified reports, there are costs incurred. Forrester reports that nearly half of all data professionals spend at least as much time prepping data as they do analyzing it. This inefficiency worsens in cases where reporting reveals a need to modify how data is captured or organized, forcing analysts and IT resources to trace data all the way back to its original source and then make changes.
In some cases, third-party reporting tools can also create a gulf between those who master the reporting technology and those seeking answers from the reports. In a recent interview, Christopher Ittner, chair of the accounting department at The Wharton School, discussed how this division affects the business process:
“What we are finding is that in a lot of companies, there are great data scientists and great business people but what is missing is business people who know enough data analytics to say, ‘Here is the problem I would like you to help me with.’ And then they can take the outcome from the data scientists and see how they can best leverage it. That is where we must get to in the next couple of years if we want to take advantage of the digital technologies.”
Providing users with direct access to reporting that requires no prep work solves both issues. End users can become their own data analysts and answer the business questions that apply to their work. Without the requirement to master the technical process of assembling, scrubbing, and joining data from multiple systems, reporting becomes more efficient, effective, and scalable.
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As hospitals and healthcare organizations work toward better patient care, they can begin by taking a closer look at their internal processes and technology. A reliance on disparate systems that fail to share data efficiently puts organizations at risk of falling short of the demands of modern healthcare. The Agency for Healthcare Research & Quality stated that one of the three most critical challenges facing today’s healthcare organizations in their mission to improve patient care is “establish[ing] an integrated data, analytics, and information platform, along with the necessary technical expertise, to capture a 360° view of the healthcare system.”
The healthcare claims process, too, can benefit from a single integrated healthcare risk management system. Having incident reporting and claims management functionalities working seamlessly in one platform offers three major advantages.
1. Increased efficiency and accuracy
Just as working with a single insurer is easier than working with several, integrating healthcare incident reporting and healthcare claims administration into one system can be easier than tracking each in separate systems. But unlike insurance, where receiving multiple coverages from the same insurer may not be possible, hospitals can integrate incident data and claim data with ease through healthcare risk management software like Origami Risk.
Having all data in one system adds convenience for healthcare risk managers who may have previously had to toggle between systems to follow along with the claim lifecycle—from the initial reporting of an incident to the closure of the claim. A daily reality that the article Improving Claims Management with Advanced Integration summarizes as “the need to switch between multiple software systems in order to find all the relevant information on a specific claim. It’s critical to have all pertinent data in one spot to reduce and/or eliminate this quest for data.”
Navigating between two systems also results in detrimental switch costs, the fractions of seconds that occur when moving back and forth between systems. These switch costs rapidly compound, leading to wasted time and increased errors, including misaligned data. With an integrated healthcare risk management system, healthcare risk managers no longer have to bounce between systems throughout the claim lifecycle. If an incident turns into a claim, they can monitor it or move it further along in the process without losing the original incident record.
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