what is risk managment

Risk management is the process of identifying, assessing, and prioritizing risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities. It is a continuing process to identify, analyze, evaluate, and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss. The key to an economical and efficient risk program is control over the risk management functions with assurance that actions performed are desirable, necessary, and effective to reduce the overall cost of operational risk. The cost of risk is comprised of financial, legal, strategic, and security risks to an organizations capital and earnings. Risk management strategies involve many concepts, including risk avoidance, risk transfer, risk reduction, and risk acceptance. Risk management is not about eliminating all risk but about preserving and adding to overall enterprise value by making smart risk decisions. In healthcare, risk management comprises the systems and processes employed to uncover, mitigate, and prevent risks in healthcare institutions.