Determining the optimal capacity and occupancy rate in a hospital: A theoretical model using queuing theory and marginal cost analysis

Muhammad Maaz and Anastasios Papanastasiou

Managerial and Decision Economics, 2020, vol. 41, issue 7, 1305-1311

Abstract: We model the hospital as seeking to balance the costs to itself in providing care, as well as the societal cost of people waiting for care. We use queuing theory to show that the optimal capacity and the corresponding optimal occupancy rate are dependent on the marginal cost of expanding capacity, the marginal cost of waiting, and the rates of patient arrival and discharge. Therefore, a universal occupancy target is unfounded. As well, the model shows that increasing capacity to respond to increased patient influxes is inadequate, suggesting that the health care system must explore alternate responses to burgeoning patient populations.

Date: 2020
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/mde.3176

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:41:y:2020:i:7:p:1305-1311

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().