Courtesy: Risk Assesment service
Broadly speaking, a risk assessment is the combined effort of:
- identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. hazard analysis); and
- making judgments “on the tolerability of the risk on the basis of a risk analysis” while considering influencing factors (i.e. risk evaluation).
Put in simpler terms, a risk assessment determines possible mishaps, their likelihood and consequences, and the tolerances for such events. The results of this process may be expressed in a quantitative or qualitative fashion. Risk assessment is an inherent part of a broader risk management strategy to help reduce any potential risk-related consequences.
Individual risk assessment
Risk assessment are done in individual cases, including patient and physician interactions. Individual judgements or assessments of risk may be affected by psychological, ideological, religious or otherwise subjective factors, which impact rationality of the process.
A systematic review of patients and doctors from 2017 found that overstatement of benefits and understatement of risks occurred more often than the alternative.
There is a tendency for individuals to be less rational when risks and exposures concern themselves as opposed to others. There is also a tendency to underestimate risks that are voluntary or where the individual sees themselves as being in control, such as smoking. A 2017 systematic review from the Cochrane collaboration suggests “well-documented decision aids” are helpful in reducing effects of such tendencies or biases. The ways statistics are expressed and communicated, both through words and numerically also impact the interpretation of benefit and harm. For example, a fatality rate may be interpreted as less benign than the corresponding survival rate.
Systems risk assessment
Risk assessment can also be made on a much larger “systems” scale, for example assessing the risks of a nuclear power plant (an interactively complex mechanical, electronic, nuclear, and human system) or a hurricane (a complex meteorological and geographical system). Systems may be defined as linear and nonlinear (or complex), where linear systems are predictable and relatively easy to understand given a change in input, and non-linear systems unpredictable when inputs are changed. As such, risk assessments of non-linear/complex systems tend to be more challenging.
In the engineering of complex systems, sophisticated risk assessments are often made within safety engineering and reliability engineering when it concerns threats to life, environment, or machine functioning. The agriculture, nuclear, aerospace, oil, railroad, and military industries have a long history of dealing with risk assessment. Also, medical, hospital, social service, and food industries control risks and perform risk assessments on a continual basis. Methods for assessment of risk may differ between industries and whether it pertains to general financial decisions or environmental, ecological, or public health risk assessment
Concept
Rapid technological change, increasing scale of industrial complexes, increased system integration, market competition, and other factors have been shown to increase societal risk in the past few decades. As such, risk assessments become increasingly critical in mitigating accidents, improving safety, and improving outcomes. Risk assessment consists of an objective evaluation of risk in which assumptions and uncertainties are clearly considered and presented. This involves identification of risk (what can happen and why), the potential consequences, the probability of occurrence, the tolerability or acceptability of the risk, and ways to mitigate or reduce the probability of the risk. Optimally, it also involves documentation of the risk assessment and its findings, implementation of mitigation methods, and review of the assessment (or risk management plan), coupled with updates when necessary. Sometimes risks can be deemed acceptable, meaning the risk “is understood and tolerated … usually because the cost or difficulty of implementing an effective countermeasure for the associated vulnerability exceeds the expectation of loss.”[9]
Part of the difficulty in managing risk is that both the quantities by which risk assessment is concerned—potential loss and probability of occurrence—can be very difficult to measure. The chance of error in measuring these two concepts is high. The risk with a large potential loss and a low probability of occurrence is often treated differently from one with a low potential loss and a high likelihood of occurrence. In theory, both are of near equal priority, but in practice, it can be very difficult to manage when faced with the scarcity of resources—especially time—in which to conduct the risk management process.