As Winston Churchill once said, ‘those who fail to learn from history are doomed to repeat it’!
Prediction with regard to healthcare demand is no more reliable than in the world of finance and neither obey traditional Gaussian, Normal, distributions and hence result in ‘boom’ and ‘bust’ or the healthcare equivalents!
I do not believe unscheduled demand for healthcare obeys a normal distribution.
By this I mean, that factors such as height and weight appear to occur in a random fashion and so follow a similar distribution to binomial probability – a normal distribution for large numbers.
However, healthcare demand, like finance, is not a random event, it is driven by outside factors some of which are; the presence or absence of virus combined with human interactions/human nature, again much like finance, ask any Greek or Italian politician at present. Since this is the case, the probability of large fluctuations, in healthcare, or finance, are much greater than could be predicted from the normal distribution, i.e. 66% of the time, calls will be within one standard deviation of the mean and 95% within two standard deviations. This is the reason we have periods of insatiable demand for health care, or crashes in the stock market that appear to be almost impossible, or reported as unprecedented, when in fact if you use the correct maths they are very foreseeable if not predictable. That is why we need to be eternally vigilant and have effective step up and step down policies. I could go on………..
Written by John Watkins, Visiting Professor