CPHRM CPHRM Enterprise Risk Management 2 — Questions and Answers
Question 1: What is the primary purpose of a risk heat map in healthcare ERM?
- To document employee incident reports
- To visually prioritize risks by likelihood and severity (Correct answer)
- To track insurance premium increases over time
- To map patient flow through clinical departments
Correct answer: To visually prioritize risks by likelihood and severity
A risk heat map visually plots risks by their probability and impact, helping leadership prioritize which risks need immediate attention.
Question 2: Which governance body typically has ultimate oversight responsibility for an ERM program in a US hospital?
- The Chief Medical Officer
- The Board of Directors (Correct answer)
- The Quality Improvement Committee
- The Department of Health
Correct answer: The Board of Directors
The Board of Directors holds fiduciary and governance responsibility, including ultimate oversight of the organization's ERM program.
Question 3: How does operational risk differ from strategic risk in a healthcare ERM program?
- Operational risk involves day-to-day processes, while strategic risk involves long-term goals (Correct answer)
- Operational risk is always clinical, while strategic risk is always financial
- Operational risk is uninsurable, while strategic risk is always insured
- Operational risk is managed by the CEO only
Correct answer: Operational risk involves day-to-day processes, while strategic risk involves long-term goals
Operational risk stems from failures in internal processes, people, or systems, whereas strategic risk relates to threats against achieving organizational goals.
Question 4: A key difference between traditional risk management and enterprise risk management in healthcare is that ERM:
- Focuses exclusively on clinical malpractice claims
- Takes a siloed, department-by-department approach
- Integrates risk across all organizational functions and aligns with strategy (Correct answer)
- Replaces the need for liability insurance
Correct answer: Integrates risk across all organizational functions and aligns with strategy
ERM takes a holistic, organization-wide view that integrates risk management with strategic planning across all departments.
Question 5: Which of the following is an example of a 'key risk indicator' (KRI) in a hospital ERM program?
- The hospital's mission statement
- Monthly staff turnover rate exceeding a defined threshold (Correct answer)
- The number of licensed beds in the facility
- The total annual operating budget
Correct answer: Monthly staff turnover rate exceeding a defined threshold
A KRI is a measurable metric that signals an increasing risk exposure; a rising staff turnover rate can indicate workforce and patient safety risks.
Question 6: In ERM, 'scenario analysis' is used primarily to:
- Audit past financial statements
- Explore potential future risk events and their organizational impact (Correct answer)
- Assign blame following a sentinel event
- Calculate workers' compensation premiums
Correct answer: Explore potential future risk events and their organizational impact
Scenario analysis in ERM helps organizations anticipate and prepare for plausible future risk events by evaluating their potential consequences.
CPHRM CPHRM Enterprise Risk Management 2
What is the primary purpose of a risk heat map in healthcare ERM?