{"id":12605,"date":"2015-01-15T11:30:14","date_gmt":"2015-01-15T16:30:14","guid":{"rendered":"http:\/\/n2value.com\/blog\/?p=12605"},"modified":"2015-01-13T16:57:20","modified_gmt":"2015-01-13T21:57:20","slug":"black-swans-antifragility-six-sigma-and-healthcare-operations-what-medicine-can-learn-from-wall-st-part-8","status":"publish","type":"post","link":"https:\/\/n2value.com\/blog\/black-swans-antifragility-six-sigma-and-healthcare-operations-what-medicine-can-learn-from-wall-st-part-8\/","title":{"rendered":"Black Swans, Antifragility, Six Sigma and Healthcare Operations – What medicine can learn from Wall St Part 7"},"content":{"rendered":"

\"antifragile\"<\/a><\/p>\n

I am an admirer of Nicholas Nassim Taleb<\/a> – a mercurial options trader who has evolved into a philosopher-mathematician. \u00a0The focus of his work is on the effects of randomness, how we sometimes mistake randomness for predictable change, and fail to prepare for randomness by excluding outliers in statistics and decision making. \u00a0These \u201cblack swans\u201d arise unpredictably and cause great harm, amplified by systems that have put into place which are \u2018fragile\u2019.<\/p>\n

Perhaps the best example of a black swan event is the period of financial uncertainty we have lived through during the last decade. \u00a0A quick recap: the 1998 global financial crisis<\/a> was caused by a bubble in US real estate assets. \u00a0This in turn from legislation mandating lower lending standards and facilitating securitization of these loans combining with lower lending standards (subprime, Alt-A) allowed by the proverbial passing of the \u2018hot potato\u2019. \u00a0These mortgages were packaged into derivatives named collateralized debt obligations (CDO\u2019s), using statistical models to gauge default risks in these loans. \u00a0Loans more likely to default were blended with loans less likely to default, yielding an overall package that was statistically unlikely to default. \u00a0However, as owners of these securities found out, the statistical models that made them unlikely to default were based on a small sample period in which there were low defaults. \u00a0The models indicated that the financial crisis was a 25-sigma (standard deviations) event that should only happen once in:<\/p>\n

\"Lots<\/a>years. (c.f.wolfram alpha)<\/p>\n

Of course, the default events happened in the first five years of their existence, proving that calculation woefully inadequate.<\/p>\n

The problem with major black swans is that they are sufficiently rare and impactful enough that it is difficult to plan for them. \u00a0Global Pandemics, the Fukushima Reactor accident, and the like. \u00a0By designing robust<\/strong> systems, expecting system perturbations, you can mitigate their effects when they occur and shake off the more frequent minor black (grey) swans – system perturbations that occur occasionally (but more often than you expect); 5-10 sigma events that are not devastating but disruptive (like local disease outbreaks or power outages).<\/p>\n

Taleb classifies how things react to randomness into three categories: Fragile<\/strong>, Robust<\/strong>, and Anti-Fragile<\/strong>. \u00a0While the interested would benefit from reading the original work, here is a brief summary:<\/p>\n

1.\u00a0 \u00a0 \u00a0The Fragile<\/strong> consists of things that hate, or break, from randomness. \u00a0Think about tightly controlled processes, just-in-time delivery, tightly scheduled areas like the OR when cases are delayed or extended, etc\u2026
\n2.\u00a0 \u00a0 \u00a0The Robust<\/strong> consists of things that resist randomness and try not to change. \u00a0Think about warehousing inventories, overstaffing to mitigate surges in demand, checklists and standard order sets, etc…
\n3.\u00a0 \u00a0 \u00a0The Anti-Fragile<\/strong> consists of things that love randomness and improve with serendipity. \u00a0Think about cross-trained floater employees, serendipitous CEO-employee hallway meetings, lunchroom physician-physician interactions where the patient benefits.<\/p>\n

In thinking about Fragile<\/strong>–Robust<\/strong>–Anti-Fragile<\/strong>, be cautious about injecting bias into meaning. \u00a0After all, we tend to avoid breakable objects, preferring things that are hardy or robust. \u00a0So, there is a natural tendency to consider fragility<\/strong> \u2018bad\u2019, robustness<\/strong> \u2018good\u2019 and anti-fragility<\/strong> must be therefore be \u2018great!\u2019 \u00a0Not true – when we approach these categories from an operational or administrative viewpoint.<\/p>\n

Fragile<\/strong> processes and systems are those prone to breaking. They hate variation and randomness and respond well to six-sigma analyses and productivity\/quality improvement. \u00a0I believe that fragile systems and processes are those that will benefit the most from automation & technology. \u00a0Removing human input & interference decreases cycle time and defects. \u00a0While the fragile may be prone to breaking, that is not necessarily bad. \u00a0Think of the new entrepreneur\u2019s mantra – \u2018fail fast\u2019. \u00a0Agile\/SCRUM development<\/a>, most common in software (but perhaps useful in Healthcare?) relies on rapid iteration to adapt to a moving target.\"scrum.jpg\"<\/a> \u00a0 Fragile<\/strong> systems and processes cannot be avoided – instead they should be highly optimized with the least human involvement. \u00a0These need careful monitoring (daily? hourly?) to detect failure, at which point a ready team can swoop in, fix whatever has caused the breakage, re-optimize if necessary, and restore the system to functionality. \u00a0If a fragile process breaks too frequently and causes significant resultant disruption, it probably should be made into a Robust<\/strong> one.<\/p>\n

Robust<\/strong> systems and processes are those that resist failure due to redundancy and relative waste. \u00a0These probably are your \u2018mission critical\u2019 ones where some variation in the input is expected, but there is a need to produce a standardized output. \u00a0From time to time\u00a0your ER is overcome by more patients than available beds, so you create a second holding area for less-acute cases or patients who are waiting transfers\/tests.\u00a0 This keeps your ER from shutting down. \u00a0While it can be wasteful to run this area when the ER is at half-capacity, the waste is tolerable vs. the lost revenue and reputation of patients leaving your ER for your competitor\u2019s ER or the litigation cost of a patient expiring in the ER after waiting 8 hours<\/a>. \u00a0\u00a0 The redundant patient histories of physicians, nurses & medical students serve a similar purpose – increasing diagnostic accuracy. \u00a0Only when additional critical information is volunteered to one but not the other is it a useful practice.\u00a0 Attempting to tightly manage robust processes may either be a waste of time, or turn a robust process into a fragile<\/strong> one by depriving it of sufficient resilience – essentially creating a bottleneck. \u00a0I suspect that robust processes can be optimized to the first or second sigma – but no more.<\/p>\n

Anti-fragile <\/strong>processes and systems benefit from randomness, serendipity, and variability. \u00a0I believe that many of these are human-centric. \u00a0The automated process that breaks is fragile<\/strong>, but the team that swoops in to repair it – they’re anti-fragile<\/strong>. \u00a0The CEO wandering the halls to speak to his or her front-line employees four or five levels down the organizational tree for information – anti-fragile. \u00a0Clinicians that practice \u2018high-touch\u2019 medicine result in good feelings towards the hospital and the unexpected high-upside multi-million dollar bequest of a grateful donor 20 years later – that\u2019s very anti-fragile. \u00a0It is important to consider that while anti-fragile elements can exist at any level, I suspect that more of them are present at higher-level executive and professional roles in the healthcare delivery environment. \u00a0It should be considered that automating or tightly managing anti-fragile systems and processes will likely make them LESS productive and efficient. \u00a0Would the bequest have happened if that physician was tasked and bonused to spend only 5.5 minutes per patient encounter? \u00a0Six sigma management here will cause the opposite of the desired results.<\/p>\n

I think a lot more can be written on this subject, particularly from an operational standpoint. \u00a0 Systems and processes in healthcare can be labeled fragile, robust, or anti-fragile as defined above. \u00a0Fragile<\/strong> components should have human input reduced to the bare minimum possible, then optimize the heck out of these systems. \u00a0Expect them to break – but that\u2019s OK – have a plan & team ready for dealing with it, fix it fast, and re-optimize until the next failure. \u00a0Robust<\/strong> systems should undergo some optimization, and have some resilience or redundancy also built in – and then left the heck alone! \u00a0Anti-fragile<\/strong> systems should focus on people and great caution should be used in not only optimization, but the metrics used to manage these systems – lest you take an anti-fragile process, force it into a fragile paradigm, and cause failure of that system and process. \u00a0It is the medical equivalent of forcing a square peg into a round hole. \u00a0I suspect that when an anti-fragile process fails, this is why.<\/p>\n","protected":false},"excerpt":{"rendered":"

I am an admirer of Nicholas Nassim Taleb – a mercurial options trader who has evolved into a philosopher-mathematician. \u00a0The focus of his work is on the effects of randomness, how we sometimes mistake randomness for predictable change, and fail to prepare for randomness by excluding outliers in statistics and decision making. \u00a0These \u201cblack swans\u201d […]<\/p>\n","protected":false},"author":1,"featured_media":12611,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"New N2value post: Black Swans, #Antifragility, #SixSigma & #Healthcare Ops: http:\/\/wp.me\/p4mtfP-3hj","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[2,7,6,5],"tags":[20],"class_list":["post-12605","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-healthcare","category-leadership","category-process-analytics","category-workflow","tag-antifragile"],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/n2value.com\/blog\/wp-content\/uploads\/2015\/01\/antifragile.jpg","jetpack_shortlink":"https:\/\/wp.me\/p4mtfP-3hj","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/12605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/comments?post=12605"}],"version-history":[{"count":9,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/12605\/revisions"}],"predecessor-version":[{"id":12618,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/12605\/revisions\/12618"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/media\/12611"}],"wp:attachment":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/media?parent=12605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/categories?post=12605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/tags?post=12605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}