title: Risk management.
abstract: Every plan contains risk. To proceed without planning some means of managing that risk is to court failure. The basic logic of risk is explained. It consists in identifying a threshold where some corrective action is necessary, the probability of exceeding that threshold, and the attendant cost should the undesired outcome occur. This is the probable cost of failure. Various risk categories in dentistry are identified, including lack of liquidity; poor quality; equipment or procedure failures; employee slips; competitive environments; new regulations; unreliable suppliers, partners, and patients; and threats to one's reputation. It is prudent to make investments in risk management to the extent that the cost of managing the risk is less than the probable loss due to risk failure and when risk management strategies can be matched to type of risk. Four risk management strategies are discussed: insurance, reducing the probability of failure, reducing the costs of failure, and learning. A risk management accounting of the financial meltdown of October 2008 is provided.
authors.forename: David W
authors.initials: DW
authors.lastname: Chambers
mesh_terms: D057189:Checklist; D003365:Costs and Cost Analysis; D003797:Dental Staff; D030881:Disclosure; D004465:Economic Competition; D004498:Education, Dental, Continuing; D004868:Equipment Failure; D005376:Financial Management / Q000191:economics / Q000458:organization & administration; D005544:Forecasting; D006801:Humans; D007341:Insurance; D007400:Interprofessional Relations; D007879:Legislation, Dental; D011215:Practice Management, Dental / Q000191:economics / Q000458:organization & administration; D011336:Probability; D011639:Public Opinion; D018570:Risk Assessment; D012308:Risk Management / Q000145:classification / Q000191:economics / Q000379:methods / Q000458:organization & administration; D017751:Safety Management; D059039:Standard of Care; D017211:Treatment Failure