Integrating Physician Practices into a Hospital-Based Risk Management Program

Amy Wasdin, RN, MBA, Patient Safety Risk Manager II

The healthcare industry continues to see a rise in the number of physician practices being acquired by hospitals and healthcare systems. This trend is influenced by: (1) new physicians entering the workforce who are focusing on maintaining a work-life balance and do not want the responsibility of managing an office setting; and (2) regulatory changes that favor establishing accountable care organizations (ACOs) and value-based payment systems.

A Challenging Task for Hospital Risk Managers

Overseeing risk management programs for acquired physician practices can be a daunting prospect for even the most seasoned hospital risk manager. If you are a hospital risk manager who does not have a background in physician practices, it is important to become familiar with the risks associated with the practice model.

Identify the required areas of knowledge and develop resources to enhance your ability to provide effective risk management services. To be successful, you must have the support of the organization’s top leadership and the physician practice leaders, as well as a clear understanding of the scope of and expectations for what must be accomplished.

It is important to establish priorities and determine the resources needed based on the size of the physician practice and its growth potential. No two risk management departments are the same, so finding data to quantify the needed resources can be difficult.

Assess Risk Before and After the Acquisition

It is important to understand the operation and environment of the practice prior to and after the acquisition so you can prepare to mitigate and manage any associated risks. Our Interactive Guide for Office Practices risk assessment tool can help you identify liability risks in an office setting. It covers the following areas:

  • Communication (with patients and among staff).
  • Lab test, procedure, and referral tracking.
  • Patient scheduling and follow-up.
  • Patient self-management and health literacy.
  • Medical records.
  • Medication management.
  • Physician/patient/staff relationships.
  • Informed consent and refusal.
  • Clinical procedures.
  • Confidentiality and privacy.
  • Emergency procedures.
  • Credentialing and staffing.
  • The work environment.
  • Systems and processes to reduce the effect of human factors.
  • Business operations.
  • Miscellaneous risk and loss control issues.

Required Resources

The resources required will be determined by the scope of the physician practice risk management program. Is the program limited to loss identification and prevention, or does it include claims management as well? Is it limited to a specific type of risk management, such as clinical risk management, or does your responsibility reflect more of an enterprise risk management approach?

If hiring additional risk management staff is not an option, it is imperative that the physician practice manager assume ownership of the practice’s day-to-day risk management responsibilities. This will require you to educate the practice manager on the principles of risk management and the expectations involved—such as reviewing incident reports, performing follow-up on reported events, analyzing data to identify trends, communicating risk management information, and educating their staff.

Larger healthcare organizations may have the resources to provide a risk manager for a more hands-on approach to managing and addressing the risk management needs of multiple physician practices.

Risk Mitigation Tips

These tips can assist you in establishing the framework for a successful physician practice risk management program within a hospital-based system:

  1. Develop an understanding of the scope of your responsibilities for physician practice risk management.
  2. Use educational resources to learn about the operation, risks, and regulatory requirements that are unique to the physician practice setting.
  3. Establish priorities for a physician practice risk management program.
  4. Determine what resources will be available to you in the physician office setting.
  5. Establish a risk management plan for the physician practice environment.
  6. Seek support from your leadership and the physician practice management leaders for your plan and the resources you will need.
  7. Communicate your plan to the program’s stakeholders (i.e., anyone who will be involved in or affected by this program).
  8. Provide education on important risk management and patient safety topics, as well as on risk management processes, such as event reporting.
  9. Provide feedback according to your program plan. This may include providing feedback to the board, a quality improvement committee, practice managers, physicians, and staff members who report events.
  10. Involve your medical professional liability insurance carrier in knowing your needs and concerns. Often, there are helpful risk management resources that can be provided to you at no cost.

Your patient safety risk manager from The Doctors Company can help you implement strategies tailored to your needs. Contact us at 800.421.2368 or

The guidelines suggested here are not rules, do not constitute legal advice, and do not ensure a successful outcome. The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider considering the circumstances of the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.

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