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Traditional risk management practices have key focus on pure
risk or hazard. It concerns with the factors which can draw impact on the
operational outcomes of the organization. Traditional risk management has four
major functions which covers leading, controlling, planning, and organizing
resources in such a way that ensure right operations execution on right time by
the use of right resources. However, the key attention always remain on
financial advantages and mitigation of hazard linked with financial results
Risk1 –
Disclosing the patients info.
Risk2 -
Services Performed within Proper Scope – Licensing
In this paper we will be discussing on how the reputation risk may impact the
company. The federal law has provided access to affordable health care through
insurance plans that are available online. People have the privilege to choose
a scheme that suits their pockets or rather comfortable with. United health
group faces this risk of reputation since the firm is failing to implement a
better alternative and to maintain its customer base. The company has terminated
contracts with doctors and in the process losing about 10,000 patients
especially in Massachusetts and Missouri. The company is losing a solid
customer network due to reputation risks.
The patient information which is stored in the Rehab center when transmitting
to the third party like insurance or for medical stores should be disclosed to
particular individual and reduce prescribing on the paper and use more
electronic which is encrypted and decrypted between two parties. All outside
help concurrences with providers incorporate a connection which incorporates
the rules that all bills for Rehab Medicare inpatients must be submitted to
their separate protection gathering. All understandings are prepared by means
of the term sheet process, which incorporates audit and mark endorsement by
Compliance. Lawful doesn't draft/endorse contract without all endorsements in
the document.
Risk: 3
Data Breaches and Third Party Access
Company stores patient’s information, medical history,
employee data, client profiles, suppliers information and financial details of
the company in online and offline databases. In the era of technology, these
areas have high security threats concerning data breaches and third party
access. Hackers can get access to such sensitive information for manipulation
and use in scams
Risk: 4
Financial Frauds or Financial Risk
Financial frauds risk relates to the internal and external
environment of the organization. Employees of the finance and accounts department
deal with important financial accounts and ensure the financial reporting
system for external investors. Data manipulation and errors are important
financial risks that need to be controlled.
Recommendation
To control the above mentioned risk factor, company need to
have a proper monitoring system in the organization. For IT security risks such
as data breaches and third party access, the company should ensure improvement
in IT security system by installing software that prevents security issues. Additionally,
financial frauds related risk factors should be controlled by improvement in
the auditing process. Internal and external independent auditing teams can
reduce the likelihood of these risk factors.
Risk Management
Analysis of the key External Environment Factors
The external environmental risk factors have a huge impact
on the organization’s performance, efficiency, and profitability. The external environment
factors such as political factors, legal factors environmental factors,
economic factors, technological factors, and social factors influence the
organization to make various decisions. In other words the organizational decisions
change with the changes in above-discussed factors. Following are the factors
discussed in detail
Political factors
The political factors include the rules and policies which
the government creates for regulating various organizations. The government
establishes laws for supporting and regulating different industries. The UnitedHealth
organization works in the medical industry, and the rules which US government
creates will impact the organization because it will have to follow those rules
Economic Factors
The economic factors include the changes in tax rates,
interest rates, inflation rate, and foreign exchange rate, etc. When the
economic factors change the organization’s cost, and the purchasing power of
the customers gets effected. UnitedHealth group won’t face much economic risk
in the United States because the economy of United States is the largest economy
in the world, and economic stability exists in United States. However in the
country like Brazil the United Group can face economic risk of foreign exchange
rate and increasing inflation or interest rates. Such changes in Brazil’s economy
can affect the profitability of the organization.
Social Factors of United healthcare Group is huge
organization and is a Fortune 500 corporation
The social factors include the preferences of the customers
that keep on changing with the passage of time. The needs of the customers are
the utmost priority of the organization. If the organization is not going to
focus on the latest trends than the company cannot sustain in the long run. The
UnitedHealth group Optum health services platform focuses on latest technology
advancements. It means that the R&D of the organization allows the
organization to provide latest products to its customers. When the customers
and clients are going to get the latest product/services, then customer loyalty
will increase, and the organization can sustain in the long run. The major risk
which the organization is currently facing is that the needs of the customers
keep on changing with the passage of time, which means that the organization
will have to come up with new technologies for meeting the needs of the
customers. It means that company will have to spend heavily on R&D
Technical Factors of United healthcare Group is huge
organization and is a Fortune 500 corporation
The technological factors have a huge impact on the
organization’s performance and profitability. UnitedHealth Group has major
focus on technology, and any technological change can affect the performance of
the company. In other words the major challenge or risk which the company is
facing is the rapid change in technology. It is obvious that with the passage
of time the company will have to keep on changing its technological products so
that it can meet the needs of the current market trends. If company did not do
this, then company might lose its competitive edge over its customers.
Legal Factors of United healthcare Group is huge
organization and is a Fortune 500 corporation
The legal factors include the laws which the government
implements for maintaining the businesses and their activities. In the United
States the government laws support the businesses and medical industry. Therefore
the UnitedHealth group does not have to worry about the legal factors. It can
be said that there are very few chances of legal risks that UnitedHealth
organization can face in United States. However as UnitedHealth Group operates
in other countries as well the chances of legal risk are higher in other regions.
Therefore the legal risks would be a major risk for the UnitedHealth group.
Environmental Factors of United healthcare Group is huge
organization and is a Fortune 500 corporation
Environment protection is highly necessary for current
environment. The customers have become awarded about environment protection. If
the organization is not going to focus on environment protection than not only
its reputation will decline, but also its profitability will also decrease as a
result.
Traditional Risk Management Factors
Enterprise Risk Management methods of United healthcare
Group is huge organization and is a Fortune 500 corporation
Definition and Explanation of United healthcare Group is
huge organization and is a Fortune 500 corporation
In this report, I will tell provide you a very brief
knowledge about enterprise risk management. Enterprise risk management is a
type of management process. It is the strategy that is specially used in
organizations to identify the risks as well as the search the expected and
unexpected issues which can affect the organizational strategies as well as the
business of the organization. The strategy of the risk management process
searches the issues, problems, and risks to identify and prepare the company
ready to handle the dangerous hazards as well as another potential that deviates
from the standards procedures. Making preparation is also included by the
practice of enterprise risk management to deal and handle the risks as well as to
decide the prioritizing multiple risks or the potential risks.
Organizations use the methods and processes of Enterprise
Risk Management (ERM) in their businesses to manage the risks and take
possession of the opportunities which are related to the objectives. It
provides a framework for the management of risks that takes apart to identify
the particular events and related circumstances. The identification of risks is
the very first phase of enterprise management. The identification of risks must
be accurate to proactive and effective enterprise risk management functions.
The researchers found a lack of risks in the related research and found it
practicality during the interviewing chief officers of the risk management. The
system enterprise risk management provides a consistent methodology for
tracking, measuring, and reporting on the risks throughout an organization
The procedures, methods, policies, as well as the plans for
risk management, must be made available in the possible wider range to the
stakeholders, investors, shareholders as well as the related parties should all
have direct access, clear as well as the part of regular document reports or
documented information. From healthcare and marketing, it utilizes enterprise
risk management in all of the related industries. In this report, we are
discussing enterprise risk management for the medical-related healthcare
industry. The company or organization is mentioned in this report is
UnitedHealth Group. The management team of the United Health Group is vast company
that provides the health care service to people effectively and efficiently. As
the company is the service provider in the region effective as well as very
famous but still there are many issues, or risk exists which are dangerous for
the existing company as well as can cause the troubles for the business.
Process of Enterprise Risk Management
The enterprise risk management is a framework that is used
to identify the risks as well as tells that how the risk management team of the
company can handle the risks or can prevent those risks or can overcome from that
kind of issues. The risk management process or model provides a guideline and
direction to the company’s management that what steps they should take to
overcome this assessed, identified or screened risks. Usually the enterprise
management process has five components or five steps for the effective
management of risks. The framework’s steps are as follows: the identification
and assessment of risks, Respond to risks, monitor and reporting on the risks,
establishment of ERM governance as well as alignment of enterprise management
process to the strategic goals and the objectives
References of Traditional Risk Management of United healthcare Group is huge organization and is a Fortune 500 corporation
References of Traditional Risk Management of United healthcare Group is huge organization and is a Fortune 500 corporation
Banks,
E., & Dunn, R. (2004). Practical Risk Management: An Executive Guide to
Avoiding Surprises and Losses. John Wiley & Sons.
Brigham, E. F., & Houston, J. F. (2012). Fundamentals of
Financial Management. Cengage Learning, 8 серп.
Measham, T., & Lockie, S. (2012). Risk and Social Theory
in Environmental Management. Csiro Publishing.
Morning Star. (2019). UnitedHealth Group Inc. Retrieved from
http://financials.morningstar.com/ratios/r.html?t=UNH®ion=usa&culture=en-US
Niu.edu. (2019). Risk Review Process. Retrieved from
www.niu.edu:
https://www.niu.edu/risk-management/enterprise/review-process.shtml
SAUNDERS. (2011). Financial Institutions management. Tata
McGraw-Hill Education.
Simona-Iulia, C. (2014). COMPARATIVE STUDY BETWEEN
TRADITIONAL AND ENTERPRISE RISK management–a theoretical approach. THE ANNALS
OF THE UNIVERSITY OF ORADEA, 1-7.
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