An effective application of risk management principles can enhance the operations of many healthcare organizations and allow management to make better and more informed decisions. One area where risk management thinking can make an important impact is in the planning and budgeting process.
Our health system depends on robust and resilient infrastructure. Understanding and mitigating risks posed on it is essential to ensure critical infrastructure runs efficiently and effectively (HealthCareCAN, 2017).
The Healthcare and Public Health (HPH) sector in the United States (U.S.) is vast and diverse. The sector employs approximately 13 million personnel and represents an estimated 16.2 percent ($2.2 trillion) of the country’s Gross Domestic Product (GDP). It includes not only acute care hospitals and ambulatory healthcare, but also the vast and complex public-private systems that finance that care.
In terms of critical infrastructure protection, the HPH Sector-Specific Plan (SSP) complements the National Infrastructure Protection Plan (NIPP) by detailing the application of the NIPP framework to the unique characteristics and risk landscape of the sector.
Critical infrastructure protection for the healthcare and public health sectors is a coordinated effort to ensure that facilities have the plans and programs needed to prepare for threats to their infrastructure, manage risks and remain resilient during and after a disaster or emergency.
A risk management approach for prioritizing efforts and focusing resources is key in addressing threats that are seemingly limitless with resources that are limited. Is it necessary to prioritize both risks and the investments made to reduce risks? Where can resources do the most good? How should they be allocated across risks and across risk-reducing activities? Risk-based, priority-driven decisions can help inform senior executives and administrators in allocating finite resources to the areas of greatest need.
As is always the case with risk, the cascading effects between the risks and how risks translate into budget allocations needs to be understood and defined. This approach will enable an organization to directly attribute specific expenses to a defined risk appetite and capacity. Overall, significant benefits can be realized by an organization implementing a risk-based budgeting approach, whether for a basic operating budgeting or for capital budgeting and deployment.
Paper-based systems and error-prone, labor-intensive spreadsheet software are simply not sufficient to deliver the budget development capabilities required to apply risk-based budgeting principles.
Questica Budget is a proven COTS (Commercial Off-the-Shelf) solution that delivers all the necessary budgeting tools, while also offering multiple options for a high level of configurability. It offers one point of data entry; gives organizations the ability to add data and make modifications; then roll the information forward into future years without any complications.
Creating different “what-if” scenarios based on identified and quantified risk is straightforward, and the impact of each scenario is immediately understood through an easy-to-use interface.
Purposely built for the public sector, Questica Budget is deployable in the cloud to ensure quick recovery and flexibility in the event of natural disasters or human-generated hazards.
Questica is the trusted partner of over 600 public sector and non-profit organizations of all sizes across North America. If your hospital or healthcare facility is looking for a technology that allows for risk-based, priority-driven budgeting, request a demo of Questica solutions today.