Project Risk Management in Health Care

In health care, risk management programs are often used to reduce the risk of medical errors and other organizational loss in operations.  Risk management activities can be classified as proactive (before an occurrence) or reactive (after an occurrence).  According to Sharon Hall, Vice President of Parker, Smith & Feek, “Proactive risk management may avoid some losses and expenses that could otherwise impact your bottom line.”  On the other hand, an overcautious approach may result in the loss of potential business benefits. (Sheppy, Zuliani and McIntosh, 2012)


Although risk management is commonly used to mitigate, avoid or transfer risks in health care operations, it is not commonly used in project management efforts within health care organizations.  Health care project managers continue to struggle with demonstrating the value of proactive risk management in project work. (Hall, 2014)


In traditional project management methodology, the project environment within which risk is taken is considered (Barkley and Saylor, 2001).  It is important to distinguish between the inherent risks in the project itself and the risks associated with the project management process.  Health care project managers now face ‘complex environmental conditions’ that increase risks. (Sheppy, Zuliani and McIntosh, 2012).


According to the British Journal of Healthcare Management article, “there needs to be a greater emphasis on placing risk relative to both operational and cultural factors.”  Health care project managers must possess both hard and soft skills in order to perceive the ‘synergistic risk impacts that arise’. (Sheppy, Zuliani and McIntosh, 2012).


In our MGT 598 Project Management class, we learned how to put together a risk management plan.  Step one is to identify and assess all potential risks.  (Sheppy, Zuliani and McIntosh, 2012).  Step two is to assess risk.  Risk factors can be assessed based on the severity of impact, likelihood of occurring and controllability. (Larson and Gray, 2014).  Step three is to develop a strategy to reduce possible damage and contingency plans. (Larson and Gray, 2014).   Step four is to implement risk strategy, monitor and adjust the plan for new risks and change management. (Larson and Gray, 2014).  According to Sheppy, Zuliani and McIntosh, “risk management should be a continuous, iterative process that requires revisiting assessed risks” (2012).


Discussion Questions:

  • Does your company use risk management to mitigate, avoid or transfer risk in project management?
  • Is risk management proactive or reactive in your firm?
  • Does your organization see the value in proactive risk management?





Erik W. Larson & Clifford F. Gray, Project Management: The Managerial Process, 6th Edition, McGraw-Hill Irwin, New York, 2014.

2 thoughts on “Project Risk Management in Health Care

  1. We have a Risk and Opportunity assessment form at work that we need to fill out for each project. In the form, we need to identify the severity, probability of occurrence, and overall impact to put a dollar amount to each Risk/Opportunity. My company tries to track risk/opportunity with an proactive approach, but not much focus is placed besides filling out this form.

  2. At my company we proactively manage risk through risk register where we tie a management reserve in the budget to the weighted impact of each risk. These risks are managed on a monthly basis. However, risk differs widely based on contract type and whether the deliverable is in a full-rate production cycle or it is the development of a prototype. Managing risk on programs that are in full-rate production is much easier because you have historical information available on the risks you have encountered on previous orders. While historical information does not perfectly correlate with future performance it does provide a solid base. Development projects are almost impossible to assess on a proactive basis. You can try but there will undoubtedly be risks that pop up along the way that you did not expect. Therefore, on these types of contract you almost have to take a hybrid approach of proactive and reactive actions. Simply going through the process of brainstorming possible risks and starting the dialogue among the team can lead to a better execution by the team.

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