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OR Practice—Efficient Short-Term Allocation and Reallocation of Patients to Floors of a Hospital During Demand Surges

Robins School of Business, University of Richmond, Richmond, Virginia 23173
School of Business, University of Connecticut, Storrs, Connecticut 06269-1041
School of Business, University of Connecticut, Storrs, Connecticut 06269-1041
College of Business, University of New Orleans, New Orleans, Louisiana 70148
sthomps3{at}richmond.edu
mnunez{at}business.uconn.edu
rgarfinkel{at}business.uconn.edu
mddean{at}uno.edu

Many hospitals face the problem of insufficient capacity to meet demand for inpatient beds, especially during demand surges. This results in quality degradation of patient care due to large delays from admission time to the hospital until arrival at a floor. In addition, there is loss of revenue because of the inability to provide service to potential patients. A solution to the problem is to proactively transfer patients between floors in anticipation of a demand surge. Optimal reallocation poses an extraordinarily complex problem that can be modeled as a finite-horizon Markov decision process. Based on the optimization model, a decision-support system has been developed and implemented at Windham Hospital in Willimantic, Connecticut. Projections from an initial trial period indicate very significant financial gains of about 1% of their total revenue, with no negative impact on any standard quality of care or staffing effectiveness indicators. In addition, the hospital showed a marked improvement in quality of care because of a resulting decrease of almost 50% in the average time that an admitted patient has to wait from admission until being transferred to a floor.

Subject classifications: hospitals; health care; dynamic programming; Markov decision processes; decision-support systems.
History: Received July 2005; revision received August 2007; accepted December 2007.