What does risk retention involve in the context of healthcare risk management?

Risk retention in the context of healthcare risk management refers to the strategy of accepting the financial consequences of certain risks rather than seeking to transfer them to another party, like an insurance provider. This approach involves an organization recognizing specific risks and deciding to bear the costs associated with potential losses, rather than attempting to eliminate or mitigate those risks through external means.

When an organization retains risk, it often does so because it believes that the likelihood of the adverse event occurring is low or that it is financially capable of managing the consequences should the event occur. This can be an effective risk management strategy when the cost of transferring the risk would outweigh the potential losses.

In contrast, transferring risk involves shifting it to another party, often via insurance. Eliminating risk entirely is rarely possible in healthcare, as many risks are inherent to the provision of care. Conducting a detailed analysis of adverse events may aid in understanding risks but does not directly pertain to the concept of retention. Thus, the correct choice captures the essence of risk retention, which is intrinsically about financing losses through the acceptance of risk.