A Simulation Optimization Approach to Long-Term Care Capacity Planning

Authors:
Yue Zhang;Martin L. Puterman;Matthew Nelson;Derek Atkins
Affiliations:
College of Business and Innovation, University of Toledo, Toledo, Ohio 43606;Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada;Centre for Research in Healthcare Engineering, University of Toronto, Toronto, Ontario M5S 3G8, Canada;Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada
Venue:
Operations Research
Year:
2012

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Abstract

This paper describes a methodology for setting long-term care capacity levels over a multiyear planning horizon to achieve target wait time service levels. Our approach integrates demographic and survival analysis, discrete event simulation, and optimization. Based on this methodology, we developed a decision support system for use in practice. We illustrate this approach through two case studies: one for a regional health authority in British Columbia, Canada, and the other for a long-term care facility. We also compare our approach to the fixed ratio approach used in practice and the SIPP (stationary, independent, period by period) and MOL (modified offered load) approaches developed in the call center literature. Our results suggest that our approach is preferable. The fixed ratio approach lacks a rigorous foundation, and the SIPP and MOL approaches do not perform reliably mainly because of long service times. We conclude the paper with policy recommendations.