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The Art of Management Science in Health Care

Boeing 747 Aircraft Taking OffIt is estimated that as much as 30% of health care costs result from waste through inefficient processes in delivering patient care. While the practice of management science can be used in virtually any business, it was traditionally designed for manufacturing plants, transportation logistics, and large corporations to eliminate waste, increase quality, and improve desired financial margins. While the art of management science was originally designed for the businesses above, the healthcare industry is starting to see the value of this practice.

East Carolina University (ECU) Student Health Service serves roughly 23,000 students in their health care clinic. They schedule almost all of their patients in advanced. Each year, a little more than 35,000 appointments are scheduled, but approximately 3,800 appointments are no-shows. This is a common problem in many clinics across the U.S. This problem resulted in an estimated cost of $400,000 per year from reduced patient access.

Researches at the university decided to implement the “overbooking” strategy most commonly used by airlines (the practice of overbooking an air flight based on statistical utilization to reduce the number of empty seats per flight). This utilized the management science techniques of accurate forecasting, decision analysis, and Monte Carlo simulation. With a well-designed plan, they were able to reduce the number of no-shows without affecting patient flow, patient satisfaction, or patient waiting time.

During the first semester of the new plan, the clinic overbooked appointment times by 7.3% with only a few patients overscheduled. This resulted in an estimated cost savings (in the first semester alone) of about $95,000.

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M. Carter, B. Golden, and E. Wasil, “Introduction: Applications of Management Science and Operations Research Models and Methods to Problems in Health Care,” Interfaces 39, no. 3 (May-June 2009): 183-85

J. Kros, S. Dellana, and D. West, “Overbooking Increases Patient Access at East Carolina University’s Student Health Services Clinic.” Interfaces no. 3 (May-June 2009): 271-87

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