High severity risks are unacceptable because they can cause severe harm to patients. Avoidance or mitigation would be good for high severity risks. Considering risks are high, To avoid them or to eliminate them is a good option rather than taking any chances. Mitigation or acceptance could be choosen for low severity risks because its okay to accept or to mitigate the risk so that the benefit would be good considering its low risk. Transferance can be done for low severity risks where those risks cannot pose core competency risks to the company .
Responding to the various categories of risk
There are four basic responses available to businesses depending on the category a given risk is placed:
Accept the risk as a cost of doing business, and decide to retain and budget for the risk ( self-insuring the risk)
Retain and budget for the cost of the risk, but take steps to reduce or avoid it
Transfer the costs associated with the risk to a third party, such as an insurance company
Avoid the risk altogether by fundamentally changing some aspect of the business.
Typically, companies deal with low frequency – low severity risks by choosing the first option above, and self-insuring the risk. Using the office supplies example above, since it wouldn’t make sense to install a $50,000 video monitoring system to protect a few hundred dollars’ worth of office supplies, most companies decide to self-insure the risk, and take only nominal steps to avoid recurrence (such as placing a lock on a door).
For high frequency – low severity risks, companies usually choose the second option above, and retain the costs of the risk, while taking steps to reduce or avoid it in the future. For example, while each individual theft in a retail store is not terribly profound, the collective amount of loss at year-end may make it worthwhile to hire security guards or install video cameras to deter and/or prevent shoplifting.
Low frequency – high severity risks are generally best managed by picking the third option, and transferring the costs associated with the risk to an insurance company or other similar external party. Taking the examples above, the costs of the losses associated with fire, natural disasters, or third-party liability and employment lawsuits can be tremendous, and are usually best transferred to an insurance company.
And finally, high frequency – high severity risks are best dealt with by avoiding them altogether. Using the unsound property example above, the property management company should consider immediately notifying the building owner and ceasing its management responsibilities until a new building is constructed.
Acceptance can be done for low severity risks because since the risks are low accepting and taking chances to get the benefits would be good. Avoidance and mitigation is good for high severity risks because since risks are too high and can cause potential harm to patients its better to avoid them or to eliminate them. Transferance can be done for low severity risks.
For a low severity of a risk, I would either choose acceptance or mitigation depending on the situation. If the risk had options of making it less severe or less likely to occur through mitigation, I would say this is the better option. If there is a risk which cannot be solved through mitigation, then acceptance would be the next option because of the low severity of the risk. For a high severity of a risk, I would choose avoidance because of how high the risk is for the product. Going forward with the risk through acceptance would cause many issues and with the severity of the risk, it’ll be harder to mitigate the issue as well (but this would be a the second option). Out of these options, I believe acceptance and transference would not reduce the risk level. Acceptance would be used when there is a very low severity of the risk while transference would be used when this risk cannot be avoided but has a major risk so protection through transference would be a better option.
Based on the options for Risk Management, choosing mitigation would be my selection for a low severity risk. If the risk is not severe there can be a way to mitigate the risk to reduce the severity level to a point where the risk may not affect your product. I do not think that you should just accept the risk, and if the risk can not cause severe harm to the patient then it would be best to deal with the risk as best as you can and try to find any options that can decrease the affect it may have. When dealing with a high severity risk I would choose to manage it through avoidance. Accepting a high severity risk can have dangerous consequences for the patients, can cause harm, and can cost the company money in lawsuits. The best option is to try and avoid it all together not put lives and your company at risk. Mitigation may help but if the risk is too severe there may not be a lot of options that can significantly reduce the risk to a safe level. I do not think acceptance will reduce the risk level because there are no actions being taken to make it safer and the risk is just left to happen eventually. Acceptance can only be used when the risk is so insignificant that the affect would not cause any noticeable outcome to the patient.
The first part of risk management, as mentioned, is to assess all the potential threats of a device by formulating a list of risks associated with its use. Each risk is then individually analyzed so that all potential hazards can be addressed and managed. According to lecture, there are four methods for managing risk: avoidance, mitigation, acceptance, transferance. Low-risk devices should be handled under acceptance and transferance procedures while high-risk devices should prioritize avoidance and mitigation to prevent such hazards from occurring. Avoidance of a high-risk device can be related to an antibiotic-releasing hip stem that presents the risk of infection if the body's own bacteria develops a resistance against the antibiotic. In this case, avoidance would require the hip stem to be coated in an alternate antibiotic unfamiliar to the body, or to remove the antibiotic component altogether and instead change the material of the hip stem to one that is more biocompatible. If this is not feasible, then applying mitigation should also suffice, such as increasing the dosage/quantity of antibiotic coating to overcome the bacterial resistance.
A consecutive factor of risk management is the use of a risk matrix, which measures any specific risk of a device by the level of its severity and its frequency of occurrence. What would be the risk management route if a design matrix for a hip stem stated that the device had a high level of severity but a low chance of occurring (i.e. transferance or mitigation)? Are there any other risk-measuring techniques that can sketch out which risks in a device are acceptable or falls under acceptance?
In my opinion, I would say that avoidance is the best option for high severity of risk because this level of risk is something that can have detrimental effects on a business. A s Benjamin Franklin once stated, " An ounce of prevention is worth a pound of cures." Companies should look to prevent high risks because if those risks cause those effects, more effort and time would be need to recover and choose another option to move forward. Mitigation should be relied upon to address low-risk situations because working to reduce the effects of low-cost situations is something that is affordable. If there is potential of high-risk involving the production and marketing of a medical device product, then the best course of action would be to prevent such risks from forming in the first place. I think that Transferance does not reduce thee risk level simply because it doesn't involve any work on the problem itself or change the nature of it. Simply, it just becomes another person's problem as the name implies. I would rely upon this method if I no longer have the resources to address the risk or if the problem is beyond my ability to solve it.
From best to worst option for each risk level-
High risk: Avoidance, Mitigation, Transference, Acceptance
Medium risk: Mitigation, Transference, Avoidance, Acceptance
Low risk: Acceptance, Transference, Mitigation, Avoidance
High risks need to be dealt with or else you may have major issues in the future including large lawsuits. The last thing you should do is accept it, and mitigating it is less optimal than fixing the issue or lowering the risk.
Medium risk requires attention, but it doesn't need to be completely avoided because it could cost more in the long run rather than mitigating or transferring the risk.
Low risk requires the least attention and shouldn't require avoidance or maybe even mitigation, due to the possibly high costs for a relatively small issue.
Most of these rankings are based off of cost, because it's the most factor to companies. Making a "perfect" product might cost too much for people to buy. There's no point in making a product if no one wants it.
In terms of high risk, I would probably lean towards either mitigation or transference, depending on the situation. If the high severity of risk is able to be sufficiently resolved or at least minimized by me and my team, obviously mitigating it directly would be the best course of action. Otherwise, transferring it on to the appropriate teams would be the best course of action. For low severity risk, depending on how low the risk is, acceptance may be the smarter move. Financially speaking, it may not be worth devoting the time and resources into resolving a low risk issue so simply acknowledging and accepting it would be preferable. However, it may be appropriate to impose procedures and record the findings to avoid similar low risk issues in the future (avoidance). Out of the types of risk management, obviously acceptance would be the one option that would not reduce the risk severity at all unless, as mentioned already, steps are taken to avoid similar risks in the future.
Typically Avoid, Transfer, Mitigate and Accept strategies are used from a high severity risk to low severity risk depending on the scope of the risk. Risk avoidance involves changing the project management plan to eliminate the threat entirely and may involve changing the objective that is in jeopardy. Risk transfer involves shifting some or all of the negative impact of a threat, along with ownership of the response to a third party. Risk mitigation implies a reduction in the probability and/or impact of an adverse risk event to be within acceptable threashold. Risk acceptance strategy implies that the project team has decided not to change the project management plan to deal with the risk or is unable to identify any other suitable response strategy.
When developing a new product or device, there is always a risk that things might go wrong. In order to effectively deal with and overcome these risks, companies need to come up with risk management plans. Dr. Simon mentioned in this week's lecture that there are 4 ways in which this can be done: Accepting the risk, avoiding the risk, transferring the risk and mitigating the risk. To answer your question, I would assume avoiding the risk is the way to go when it comes to high severity risks. This means that you would have to completely change the plan you had for your device initially to a plan that doesn't carry those same risks. For low severity risks, I would think that you would use the mitigation strategy where you work to limit that risk. Accepting the risk and taking no action to correct it is probably the most useless one out of the other 3 strategies.
For low severity risks, I find that acceptance and transference are the best options. Since it is a low risk, you may as well just take the risk upon yourself for the chance of a great reward. Another option would be to transfer the risk. While this takes the risk off your shoulders, it moves it to someone else who might be better equipped for accepting the low risk. For high severity risks, mitigation would be the best choice if the reward is worth it. The other best option would be to avoid this risk entirely. For all the other risks in the middle, I would consider mitigation the be the best choice to reduce the risk, then transference, and followed with avoidance and acceptance.
As Dr. Simon has mentioned, sometimes it is cheaper for the company to allocate certain money for the risk of the product rather than dealing with reducing the risk. Companies should look to prevent high risks because if those risks cause those effects, more effort and time would be need to recover and choose another option to move forward. If there is potential of high-risk involving the production and marketing of a medical device product, then the best course of action would be to prevent such risks from forming in the first place. I think that Transferance does not reduce thee risk level simply because it doesn’t involve any work on the problem itself or change the nature of it. n my openion that acceptance may not reduce the risk level out of the options listed above unless there is a plan in place to deal with the potential issues.
For high level risks, I would do my best to mitigate the risk in an attempt to decrease the severity of the risk and then would try to employ transference to see if anyone else can do something to circumvent the risk. If not, I would employ avoidance to circumvent the risk as best I can. For low level risks, I would either try to mitigate the risk in an attempt to make it not a risk at all, or I would employ transference so someone else can employ any strategies they have to take care of the risk.
Out of all four methods, I would say that risk acceptance does nothing to affect the risk as you are just accepting it for what it is and not not doing anything else to try and reduce it. The only time I would employ this method is for low level risks that would not affect the product too negatively if they did come into play.
This is a great question! For high level risks, I would try my best to go with avoidance, I do not want to put the patient and the company at risk, given that we know the failure occurs frequently and its effects are severe. It's not worth it to put a product out there, that could and most probably will fails and will affect the patient's health, trust in us, it would affect our partners and clients, our brand name, and so much more. So avoidance is the way to go. For the low level risks, we have some options. If it were a big company with a lot of money, I would go for the transference route. Usually companies don't sell only one product and have only 3-4 risks to evaluate, they probably have hundreds of products, each with 20-50 risks to evaluate. So the low levels I would try to push off onto someone else's shoulders so I can focus on the more risky features that would have a larger impact. Transference doesn't really reduce the risk level, because we don't really take any actions to amend our product to eliminate the risk but sometimes it's the most economical route to take.
