Certified Professional in Health Care Risk Management (CPHRM) Practice Exam 2026 - Free CPHRM Practice Questions and Study Guide

The term that describes the chance of potential loss is "risk." In the context of health care and risk management, risk refers to the uncertainty surrounding potential adverse events or outcomes that can result in loss or harm, whether that be financial, reputational, or related to patient safety. Risk evaluation involves identifying potential hazards, assessing their impact, and implementing strategies to manage them effectively to minimize loss.

While insurance involves transferring risk from one party to another, it doesn't inherently describe the chance of loss itself. Value refers to the worth of something, typically in a financial context, which is not directly related to the concept of risk. Liability, on the other hand, pertains to legal responsibility for harm or loss, but it is a consequence that arises after an incident rather than a measurement of the likelihood of that incident occurring.

Understanding risk is crucial in health care, as it helps organizations to make informed decisions about safety precautions, policy development, and resource allocation to mitigate potential losses.