Enterprise Risk Management
for Health Entities
Discussion Forum
Definitions and Framework
• How does ERM differ from “business management” in
sense we have previously used it ?
the
• How does ERM differ from “strategic planning” ?
• How does the role of the health actuary fit into ERM ?
• Who are the other professionals in a firm that are part of an
ERM process?
• Can the ERM process be tailored to fit health insurance needs
and functionality?
• How many firms have a CRO or Risk Management Team?
• What are the barriers to implementing an ERM process?
• Do you feel qualified to be a CRO? Why or why not?
• How does ERM “look”
for a health care provider vs. a payor?Slide 2
Potential Discussion Points – Round Table Session
Unique Health Entity Characteristics
• Time Horizon
• Unique Risk Factors
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Trend Uncertainty
Provider Contracting and Access
Rate Increases / Morbidity / Lapsation
Risk Concentrations
Government Intervention
Enrollment Growth and Decline
• Impact of Investments
– ALM Impact – Matching Risk?
– Liquidity Risk
– Cash Flow Testing (NAIC filing – Section 7 & 8)
• Unique Capital Expenditures
– Systems - mandated or strategic
– Network, Operational, and product development
• Others???
Potential Discussion Points – Round Table Session
Slide 3
Practice – Assessment of Processes
• Any use of Stochastic or Dynamic Modeling?
– What is planning/forecast process ?
– Is there a point of “diminishing returns” for modeling ?
• Involvement of Actuaries in risk assessment?
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Environmental
Financial
Operational
Pricing
Market or Reputational
Strategic
Others?
• How do risks get identified or categorized?
– What risks go unmodeled and why?
Potential Discussion Points – Round Table Session
Slide 4
Practice – Assessment of Planning
• Categorize the Budget Process
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How are Tactical and Strategic budgeting/planning linked?
What risks are included in the budget/planning process?
How is Capital Budget integrated into Budget and Planning?
How are Actual/Expected and Recast outcomes handled?
• How are companies’ risk tolerance measured?
– Profit outcomes?
– New Ventures?
– Quantification
• How does provision for adverse deviation fit the into
planning process?
• What are surplus targets and how are they established?
Potential Discussion Points – Round Table Session
Slide 5
Practice – Employer Viewpoint
• Has the modeling of behavioral characteristics
been researched?
– Data mining of information from various employer files
related to health care, worker’s comp, short-term
disability, etc.
• How are employers managing their risk of
increasing health care costs?
Potential Discussion Points – Round Table Session
Slide 6