Fundamentals of Risk Management

Risk assessment
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TAbLE 
10.6
Definitions of impact
Descriptor
Definition
Small
No impact on patient health; minor reduction of reputation in
the short run; no violation of law; negligible economic loss
which can be restored
Moderate
Minor temporary impact on patient health; small reduction of 
reputation that may influence trust for a short time; violation of 
law that results in a warning; small economic loss that can be 
restored
Severe
Serious impact on health; serious loss of reputation that will 
influence trust and respect for a long time; violation of law that 
results; large economic loss that cannot be restored
Catastrophic
Death or permanent reduction of health of patient; serious loss
of reputation that is devastating for trust; serious violation of
law; considerable economic loss that cannot be restored
the scope for achieving further risk improvement is often represented using a risk 
matrix. In this case, the risk matrix will demonstrate the level of risk in relation to 
the additional measures that can be taken to improve the management of that risk, 
and thereby set a target level for it.
The risk matrix can be used to record the outcome of the risk rating exercise and 
this will provide a simple visual presentation of the significant risks that have been 
recognized or identified. In undertaking a risk assessment exercise, it is also necessary 
to rank the risks against the risk appetite of the organization or the risk criteria that 
have been established. The stage of risk rating is referred to in ISO 31000 as risk 
analysis and the stage of risk ranking is described as risk evaluation.
A risk is significant if it could have an impact in excess of the benchmark test for 
significance for that type of risk. Identification of potentially significant risks will be 
undertaken during a risk recognition exercise. It is necessary to decide the:
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magnitude of the event should the risk materialize;
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size of the impact that the event would have on the organization;
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likelihood of the risk materializing at or above the benchmark;
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scope for further improvement in control.
This will lead to the clear identification of the priority significant risks. Most
organ izations will find that the total number of risks identified in a workshop is

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