Fibrosis (the scarring which you’re referring to) is a reaction to liver inflammation and/or damage. The fibrosis is very tough – imagine like a thick towel or burlap sack. Liver cells cannot traverse it. In the setting of chronic ongoing injury, the fibrosis makes bands across the liver (the fibrosis goes between structures called portal tracts if you’re interested). Eventually the fibrosis becomes so extensive that it surrounds groups of liver cells (maybe 100 or so) and creates nodules. This is called cirrhosis. This degree of fibrosis causes obstruction of liver ducts and blood flow which leads to liver failure.
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