A while ago, I came across an intriguing discussion thread on the Medical Device Engineers Network on LinkedIn.  Someone asked the question whether the Design Review, one of the required elements of FDA regulations on Design Control, creates a Moral Hazard in the medical device development process.  In the discussion, the commentator also touched upon whether it is the phenomenon of the Moral Hazard that has resulted in, or at least contributed to, an increase in the number of medical device recalls in the past years.  The original intent of the Design Review, of course, was to reduce the number of recalls.  But sometimes what seems like a good solution can in fact have unintended consequences. The original essay that sparked the LinkedIn discussion was by Les Bogdanowicz and may be found on his LinkedIn profile (though you need to log in to the site to see the article).  
According to Merriam-Webster, the term moral hazard originated in the insurance industry.  An excerpt of the Wikipedia definition is as follows: “the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.  Moral hazard rises because individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions. For example, an individual with insurance against automobile theft may be less vigilant about locking his/her car, because the negative consequences of automobile theft are (partially) borne by the insurance company.”  

In the case of the Design Review, the claim posed is that the design review has diluted the accountability of a design flaw from a single designer to the multiple people serving on the design review committee.  Thus, as no one individual bears the direct responsibility or accountability of the consequences of the design flaw, a flaw may go through the design process unidentified and the risk passed along to the user.  It is sort of a “diffusion of responsibility” type of situation, perhaps exacerbated by pressure to speed a product to market.

The commentator who initially started the discussion on LinkedIn mentioned that he has seen engineers “whip up a design with the mentality that if it passes the DR then it is ok.”  However, a couple of the subsequent posts generally expressed that it was not their experience to see responsibility of the integrity transferred because of design reviews.  As someone who is regularly responsible for Design Reviews in my company, the entire discussion made me stop and reflect upon the question.  We strive to ensure that all Device Reviews are thorough and effective, as the last thing we want is a design flaw in our clients' products.  In my next column, I will explain why and how I think that the Moral Hazard can be effectively addressed by a responsible Design Review Committee.