What is Risk Reduction Worth?

By Matthew Sappern

Summary

Healthcare organizations often evaluate technology through the lens of infrastructure, integration, and cost. Yet in high-risk care settings like obstetrics, Matthew Sappern discusses why technologies that can help prevent avoidable harm should be evaluated not just as software, but as part of a health system’s broader approach to managing risk.

Introduction

Watching my son work through medical school applications this summer gave me immense pride — and a moment of pause.

I am proud of his empathy, determination, and desire to care for others. And I hope that when he emerges from this gauntlet, healthcare has embraced tools that help his generation manage increasing clinical complexity, staffing strain, and burnout.

Those pressures exist across healthcare, but in some specialties the margin for error is especially narrow, and the consequences of preventable failure can border on existential.

My perspective has been shaped by several years leading a healthcare technology company serving obstetrics — one of a small number of critical specialties where, alongside areas such as emergency medicine and neurosurgery, malpractice claims can combine high frequency with extraordinary financial severity.

Spending time with caregivers, health system executives, and risk management leaders has made one thing increasingly clear to me: in these environments, clinicians need more than training or resilience. They need systems designed to help reduce avoidable risk.

Which leads to the question at the heart of this piece:

Should technologies designed to reduce risk in high-acuity, high-liability clinical environments be evaluated the same way as ordinary software?

I don’t think they should.

A Second Lens: Risk Architecture

Health system CIOs and CTOs have an extraordinarily difficult job. They are responsible for cybersecurity, interoperability, reliability, integration, cost, and an ever-expanding technology stack, all while supporting patient care and pressure to innovate. Colleagues in procurement and sourcing are pressed to reduce expense wherever possible to strategically stretch the operating budget. Efforts to consolidate vendors and simplify infrastructure are understandable and necessary.

But in the highest-risk areas of care, IT architecture is not the only architecture that matters.

There is also a risk architecture.

Health systems generally manage substantial malpractice exposure through self-insurance and captive structures. For them, the capital at risk from a catastrophic clinical event can dwarf the annual cost of technology intended to help prevent one. Avoiding even a single preventable event can potentially offset years of technology investment.

And the cost is not only financial. Beyond the obvious catastrophic effects on patient families and institutional reputation, serious adverse events can have a lasting impact on the physicians and nurses involved. An avoidable outcome can change how clinicians practice, affect their confidence and well-being, and, in some cases, contribute to an exit from patient care.

Risk architecture begs a complementary set of purchase considerations.

Where are the most consequential medico-legal exposures? Which failures create disproportionate human and financial harm? Where can technology help clinicians recognize deterioration sooner, standardize response, or escalate concerns more reliably? And is there evidence that the technology can help improve the outcomes that matter?

The Bar Should Be High

This is not an argument to protect every specialized application from technology consolidation. Quite the opposite.

Technology designed for high-risk clinical environments should face a higher standard. Evidence, outcomes, and governance matter.

In obstetrics, for example, PeriGen clients have reported measurable improvements in serious adverse outcomes through clinical programs that include PeriGen technology. At a recent nursing conference, the University of Maryland Medical System presented a 17% reduction in hypoxic-ischemic encephalopathy (HIE) cases stemming from a program leveraging PeriGen technology and a shared mental model. Community Health Systems similarly reported a 12% reduction in unexpected complications in a recent community impact report following implementation of PeriGen technology — and a mandate to use it.

The point is not that PeriGen is unique, or that every point solution deserves special treatment. It is that some specialized technologies can materially alter a concentrated source of clinical risk.

Regulatory oversight can provide another important quality signal. FDA clearance, where applicable, does not guarantee better outcomes, but it does indicate that technology has been developed and evaluated within a formal regulatory and quality framework and found to be safe and effective.

A point solution with little evidence behind it is still just another point solution.

But a specialized technology that addresses a material source of clinical risk, demonstrates meaningful outcomes, and meets appropriate regulatory standards deserves to be evaluated differently.

The Funding Conversation Should Broaden, Too

If certain technologies are part of a health system’s risk architecture, traditional IT and operating budgets may not always be the only appropriate source of support.

From an IT perspective, a specialized application can understandably look like another contract, another integration, and another vendor competing against many legitimate priorities.

From a risk perspective, the economics can look very different. And this is where risk executives need to use their voice.

IT should continue to evaluate architecture, security, integration, and operational fit. Clinical leaders should assess workflow and patient-care impact. But risk management, captive leadership, and those responsible for retained exposure should bring the economics of risk into the decision—and, where appropriate, help augment the funding available for proven risk-reduction technologies.

The question cannot simply be:

“Can we afford another application?”

Risk leaders should also be asking:

“What is the enterprise willing to invest to reduce a known and concentrated source of risk?”

Moving Risk Management Upstream

Healthcare risk management has necessarily devoted enormous expertise and resources to what happens after an adverse event — insurance, claims management, legal defense, policy, education, and retrospective review.

All remain essential.

But there is also an opportunity to move further upstream.

Clinical decision support, continuous surveillance, centralized monitoring, escalation tools, and analytics can provide another layer of support around caregivers working where the margin for error is smallest.

This is not about replacing clinical judgment. It is about giving clinicians better tools to exercise it.

And it is not about risk management overriding IT. It is about risk executives bringing a perspective to these decisions that few others in the organization possess: an understanding of both the human consequences and the long-tail economics of clinical failure.

When a proven technology is being evaluated in a high-acuity, high-litigation service line, risk leaders should make sure one more question gets asked:

What risk are we accepting if this capability goes away — or if we choose not to invest in it?

Which brings me back to my son, and our collective responsibility to the next generation of caregivers.

We will continue asking a great deal of them. In turn, we need to give them the tools and systems that make excellent care more achievable.

In the areas where clinical and enterprise risk are most concentrated, some technology is more than software.

It is part of the health system’s risk architecture.