ITS 835 Chapter 5 ERM in Practice at the University of California Health System Enterprise Risk Management Professor Michael Solomon Introduction • University of California’s ERM • Technology • Premium rebate program • • Professional Liability Prescription Program (PLPP) ERM and the Center for Health Quality and Innovation • Protected health information value estimator • PHIve University of California’s ERM • • • • • University of California (UC) Health System • • Clinics, medical centers, schools Over 3 million patient visits annually UC Office of the President’s Office of Risk Services • Responsible for ERM UC formally adopted COSO Integrated Framework in 1995 • Committee of Sponsoring Organizations Internal Control Newly hired Chief Risk Officer (CRO) • Experienced in ERM from industry Key Performance Indicator (KPI) • Critical to ERM foundation Technology • UC’s approach incorporates technology • ERM information system (ERMIS) • Initial phases • • • Simple risk assessment tools Dashboards Control, mitigation, monitoring, survey • Dashboard system • • Based on KPIs Visual indicators ERM Process ERMIS Dashboards UC MMR (My Managed Risk) Portal UC’s Approach to Evaluating Incidents, Events, and Claims Premium Rebate Program • • • • Program to reduce frequency and severity of loss • Professional Liability Prescription Program (PLPP) Encourage risk reduction initiatives • Aimed at reducing cost of risk Rewards units for implementing effective initiatives • • Annual rebates for initiatives that work Driving concept - Everyone is a risk manager ERM and the Center for Health Quality and Innovation • • Joint venture to award up to $8 million Reduce risk of clinical harm to UC surgery patients PHIve • • • • Personal health information (PHI) UC asked Bickmore to develop a software tool • • Estimates the value of PHI PHI value estimator (PHIve) PHIve steps • Process determines the impact of PHI breach Repercussions • • • • • Reputational Financial Legal and regulatory Operational Clinical Summary • Risk is a part of all organizations • ERM assists organizations in managing all risk • UC deliberately advanced ERM to reduce overall risk • UC Office of Risk management updates risk plans in an ongoing effort • Technology is a cornerstone of UC’s ERM ITS 835 Chapter 3 ERM at Mars, Incorporated: ERM for Strategy and Operations Enterprise Risk Management Professor Michael Solomon Introduction • • • • • Mars’ ERM history • • Phase 1 – Crash and Burn Phase 2 - Success Global rollout Reporting Operating workshops • • • Technology Aggregation Template evolution Conclusion Mars’ ERM History • • • • Mars, Incorporated • • • Privately held -> migration to non-family management • Decentralized management Leadership had legacy commitment to risk management ERM was viewed as an evolution COSO versus bespoke approach • • COSO – Committee of Sponsoring Organizations structure Bespoke approach won Phase 1 • Failed due to being impractical and overly complex Phase 2 • Simpler and targeted Planning Workshops • • Desire to align senior management goals with ERM Started with simple template • • Operating plan initiative sheet • • • • Objective Score Risk column Risk treatment column Management team met to define and rank • • Risks Risk treatments • Changed label from “mitigations” Global Rollout • Used lessons learned from pilot • Each unit has specific nuances • Interviewing GM and CFO together saved subsequent interview time • Workshops helped to identify • • • Gaps in risk management readiness High-risk initiatives Ongoing activities with unexpected high risk Reporting • Color-coding adds • • Urgency Clarity • Groups are defined • Clusters • Score represents • Confidence of meeting goals Reporting, cont’d. Reporting, cont’d. Reporting, cont’d. Operating Workshops • Several ongoing changes • Technology • • • Early-on, process was technology agnostic Word -> Excel Excel -> purpose-built software • ERM supports aggregation • More complete view of organizational impact of risk • Continual template evolution • Added risk treatment owners and due dates Summary • Mars received an award for their ERM • Corporate Executive Boards’ “Force of Ideas Award” for ERM • Key factors for ERM success • • Alignment with Mars’ principles Focus on meeting objectives • • • • Operational Strategic Flexible Realistic
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