The healthcare landscape continues to experience change at an accelerated rate. To remain relevant, competitive and financially sustainable industry leaders recognize it is essential be more innovative and nimble in order to respond appropriately to evolving organizational needs. While such an environment can create opportunities, it also generates risks that, left unchecked, could disrupt an organization’s efforts to achieve its mission-critical goals.
As organizations embark on this transformational journey, they need to identify opportunities for the internal audit function to maximize its value and contributions. Internal auditing needs to shift from an assurance function that is primarily reactive, backward looking and focused on financial matters, to a function that balances assurance with a proactive, forward-looking strategic advisory role.
Enabling a strategic focus: A strategically focused internal audit program will align with the overall objectives of the organization. The intent is to understand the impact of the disruptive forces and how best to respond. Strategic initiatives - from quality of care, to physician recruitment and cybersecurity - play into the purpose, delivery and relevance of healthcare, and how effectively organizations are setup to provide service. Internal audit should be engaged with the highest levels of support.
Operating in an advisory capacity: The scope of change in healthcare mandates a structure designed to respond to evolving needs. Internal audit should be an integral component. For example, a consultative enterprise risk management (ERM) structure used to connect with entities across an organization, allows internal audit to develop an overarching risk profile that could be shared with the board and leveraged to inform decision making and annual work plans.
Introducing a risk framework: The ability to identify, manage and mitigate risk is inherently necessary for an internal audit function to perform its duties. As internal audit becomes part of an organization’s culture, stakeholders will become more focused on asking difficult questions for any given project. What are the threats? How willing are we to address the concerns, and how can we mitigate them? Equally important, what is the worst-case scenario if the risks remain unmitigated? The task of internal audit is to offer insight, and support an organization as it explores risks.
An internal audit function that enables a strategic focus, operates in an advisory capacity and introduces a risk framework will be highly valued and viewed as an imperative strategic partner to the organization.
No matter the size of the organization, a myriad of risks and opportunities exists across the enterprise. How do executive leaders gain confidence that risks are identified and managed? For many, internal audit serves as a solution, especially given that the profession of internal auditing has evolved from transactional testing to proactive evaluation and confirmation of risk approaches and strategies.
For most internal audit departments, interest in engaging in strategic initiatives is high, but the capacity to do so is not. An agile, highly specialized team is required to address the needs of large and complex organizations. The ability to bring essential expertise in-house, particularly given that subject matter experts are not always needed on a continual basis, is difficult for organizations to reconcile.
To be successful, organizations need experts who can provide unique insight into strategic undertakings - a partner that provides line-of-sight to best practices and trends across the healthcare industry, exposure to other environments and access to ad hoc expertise. Co-sourcing is a viable solution for organizations struggling with this dilemma.
Co-sourcing is a partnership between the in-house internal audit and an outside professional service provider that work together toward a shared goal. The intent of this model is to augment internal audit with competencies that cannot realistically be hired. Applying a co-sourced solution brings the benefits of internal audit across the organization, without the infrastructure required to build such a service in-house.
Leveraging our extensive experience as internal auditors, Baker Tilly provides internal audit services ranging from performing one-time projects, to supplementing existing departments, to delivering all internal audit services. In the last three years alone, we performed hundreds of internal audit engagements to help clients achieve their business objectives. With more than 200 internal audit and risk professionals, our services are flexible and scalable to fit each client’s needs.
For more information on this topic, or to learn how Baker Tilly’s healthcare internal audit specialists can help, contact our team.