Research Paper
Anil Surendra Modi School of Commerce
2023-24
Operations Research
[Link] Finance A
Group Members:
Chirag Khandelwal – F062
Foram Nathani – F077
Shravani Chaugule – F078
Prahlad Hegde – F079
Mananshi Jain – G001
Application of Operation Research in Healthcare
Industry
Abstract:
Due to limited resources and a growing population, many governments, particularly those in
developing countries, face significant challenges in delivering high-quality healthcare services
to their citizens. Consequently, innovative operations research (OR) techniques have been
developed to address various healthcare-related tasks, including operating room scheduling,
emergency department staffing, breast cancer screening, radiotherapy treatment planning, long-
term care planning, and home healthcare planning. Research in the field of healthcare not only
aids hospitals in more effectively managing their patients but also enables them to provide
superior treatment while enhancing operational efficiency. This paper offers an exploration of
the applications of operations research in the healthcare sector, with a particular focus on India.
It also provides an overview of the healthcare landscape in India.
Keywords: Public Health, Operations Research, Optimization, Healthcare Planning, Patient
Scheduling, Staff Rostering, Forecasting
Introduction:
The healthcare sector, both in developed and developing nations, stands as one of the largest
and service-oriented industries. Quality and safety in patient care delivery are of utmost
importance, making it a critical service industry. In India, healthcare has emerged as one of the
most substantial sectors in terms of revenue and employment. This all-encompassing field
includes hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism,
health insurance, and medical equipment. India's healthcare industry is experiencing rapid
growth due to increased public and private investment, expanding services, and broader
coverage.
Operations Research (OR) is dedicated to applying analytical methods to enhance decision-
making processes. Hospital managers are tasked with devising innovative strategies to
efficiently deliver high-quality healthcare to patients, and Operations Research can be applied
to various aspects such as cost management, supply chain optimization, distribution, service
quality, and ambulance transportation. This report aims to provide an overview of OR in
healthcare to offer a comprehensive understanding of its global applications.
The global healthcare industry is undergoing significant transformations due to the world's
growing population and advances in medical treatments. These changes have profound
implications for how healthcare organizations function. Healthcare providers are challenged to
deliver more efficient, cost-effective, and profitable services, necessitating innovation in the
field. To remain competitive and enhance profitability, healthcare organizations must devise
strategies that meet these evolving demands.
Industry Overview:
Research indicates that the healthcare market has the potential to expand significantly, possibly
tripling to reach $8.6 trillion by 2022. Notably, India's public health expenditure in the 2021
budget accounted for just 1.2% of the GDP. Consequently, the integration of Operations
Research (OR) in the healthcare sector becomes imperative to enhance industry efficiency and
adapt to evolving technological forces. It is essential to transition the industry toward more
reliable solutions that improve hospital efficiency, enhance service quality, and facilitate
decision support systems empowered by OR, ultimately leading to better decision-making. OR
methods have found valuable applications in hospital operations to optimize their effectiveness
and efficiency.
This report utilizes various operational techniques, including:
• Queuing Theory: This approach aids in predicting the number of people expected in a
queue, estimated waiting times, and more. It proves invaluable when making decisions
to minimize queue length and duration while keeping investment costs to a minimum.
• Simulation Modeling: This technique involves creating a model that mirrors real-world
situations and conducting experiments within it. It provides valuable insights into
complex scenarios.
• Integer Programming Model: Employed when one or more variables can only take
integer values, this model is particularly useful for certain healthcare applications.
These techniques play a pivotal role in enabling the healthcare industry to effectively apply
Operations Research, contributing to its enhancement and adaptation to contemporary
challenges.
The healthcare industry was
projected to reach a total size of
$280 billion by the year 2020,
as illustrated in Graph 1.
According to the Investment
Commission of India, this
sector has displayed
remarkable growth, averaging a
12 percent annual increase over
the past four years. Several
factors contribute to this
growth, including rising
income levels and a burgeoning
elderly population.
However, the healthcare sector in
India faces substantial challenges. It
is severely understaffed, and there is
a notable scarcity of hospital beds to
accommodate patients. While the
global average is 3.96 hospital beds
per 1000 population, India falls
significantly short with just over 0.7
hospital beds per 1000 population.
Additionally, India grapples with a
shortage of essential medical professionals, including doctors, nurses, and paramedics, which
are crucial to support the burgeoning healthcare industry. The prevalence of lifestyle-related
diseases has driven an upsurge in healthcare expenditure.
Research Objectives:
In the field of healthcare, it is imperative to carefully consider both the possibilities and
obstacles while formulating research goals. In this regard, several critical research objectives
emerge for the application of operations research (OR) in the healthcare sector. These
objectives encompass a wide range of challenges and opportunities. They include optimizing
hospital resource allocation to ensure effective patient care, reducing patient wait times by
enhancing appointment processes, improving healthcare supply chain management to procure
supplies cost-effectively, streamlining emergency room management for peak demand
efficiency, developing disease prediction models to facilitate timely treatment, and improving
hospital bed management and patient flow. Furthermore, there is a focus on enhancing
medication administration to reduce costs and prevent shortages, streamlining processes to
improve healthcare quality and security, and optimizing logistics in home healthcare to provide
superior patient care. Additionally, objectives involve increasing the effectiveness and quality
of telemedicine services, expediting clinical trials and medication development through
efficient processes, and balancing or enhancing care quality while simultaneously reducing
healthcare expenses. Long-term care facility operations, healthcare policies' quality and cost-
effectiveness, primary care patient flow and appointment scheduling, as well as the wise
utilization of healthcare resources during times of need, are all critical areas for research and
improvement. Lastly, leveraging OR to generate individualized therapy suggestions and
employing it in healthcare data analytics for more informed decision-making are vital
components of research objectives in this field. These objectives collectively contribute to the
advancement of healthcare operations and the delivery of high-quality patient care.
Research Methodology:
Research Methodology is divided into two parts. Under the primary data collection part, we
went through the various research papers, journals, articles published on the internet to find out
major problems in healthcare sector. As a part of the secondary research, we studied various
operations research techniques that could be applicable to solve the major problems already
analyzed. We used problems like staff and patient scheduling and solved it through techniques
like genetic algorithm.
Literature Review:
The healthcare sector holds paramount importance as it deals with matters of life and death.
Operations Research methodologies play a crucial role in enhancing the industry's resource
utilization, achieving performance objectives, cost management, and discovering optimal
solutions. The industry's effectiveness hinges on its ability to allocate resources and tackle
challenges. This study seeks to identify the various issues encountered by the healthcare
industry and elucidate the application of Operations Research in addressing these challenges
and attaining optimal outcomes.
Patrick et al. (2008) gave a model for patient scheduling based on varying priorities as a
Markov decision process. Markov decision processes provide a mathematical framework for
modelling decision making in situations where outcomes are partly random and partly under
the control of a decision maker. Turhan et al. (2013) used heuristic models called Fix-and Relax
and Fix-and-Optimize for Patient Admission Scheduling. Fix-and-Relax is used to find an
initial solution to the problem which is further improved using Fix-and Optimize. Green and
Savin (2008) gave a single server queue model for last minute cancellation of appointments by
patients. Simulation was used by Patrick and Puterman (2007) to achieve resource utilization
and flexibility in appointment scheduling. Finareli and Johnson (2004)5 elaborates a nine-step
quantitative demand forecasting technique for the availability of healthcare services within
right time and place. Mohanty and Chakravarty found uncertainty and imbalance between the
number of patients and the availability of medicines in hospitals during epidemic disasters.
These findings suggest the need for more serious attention to the supply of medical conditions
in situations of natural disasters, especially drugs, which helps in the inventory control of
medicine in hospitals.
A. Patient Scheduling
Patients have to make appointments to visit specialists. This gives rise to the problem of long
waiting time at clinics and hospitals before consultation. Hence appointment scheduling or
patient scheduling is an important field of research in healthcare. Researchers have used
various OR techniques to make appropriate appointment schedule so as to minimize waiting
time. Making optimal patient-staff schedules and patient-facility schedules can help to save
time and reduce cost. A good appointment schedule aims at least waiting time for patients and
minimizes overtime for staff constrained by the patient load and staffing. OR models are
developed by authors to answer the given three questions:
1) How many patients should be scheduled on a given day?
2) How should appointment slots be allocated to these patients on a given day?
3) What will be the optimal sequencing of heterogeneous patients?
B. Nurse Rescheduling
Previous studies have shown that inconsistencies or dissatisfactions between what nurses
anticipate of their work schedules and what they experience are solid predictors for their
commitment to leave. The Rochester Methodist Hospital was used because many factors
showed that the Methodist hospital was well placed to conduct the research and implement its
results.
• The rotation problem: The planning problem addressed in the research plan was maintaining
an efficient workforce. However, the undeniable signs indicated a likely recurrence of a nursing
shortage that would last longer than the cyclical shortage of the past.
• Three Experimental Schedules: The primary two experimental sets were assigned either
conservative shifts or computer-assigned scheduling. The third group designed their program,
which was classified as a selected plan. The second, complex program aimed to give nurses
flexibility and the ability to customize their schedules. In the complicated schedule, a
computerized arrangement was used to generate a monthly schedule based on a combination
of the dayto-day needs of the unit in the unit and the requirements of its employees. Each
station selected two RNAs and one LPN to advance the schedule based on group ideas. The
guidelines for budget and legal constraints were specified to each workstation, and the nursing
administration helped if the treatment groups needed help.
• Random Sampling: The data was collected from all nurses and registered nurses who were
regularly assigned to nursing wards. Because the primary goal of this intervention was to
monitor nurses on a ward, a random sample was used for stations rather than specific people.
Type B units were predominately surgical and more frequently circular. Therefore, a fully
balanced sample in the 3 stratification variables was not possible.
Results indicate significant differences in scores between the experimental and control groups
after the experimental treatments were administered. In contrast, before the intervention, there
was a difference in only one scale. Select a plan scheduling group was significantly different
from the control in some scale's expectation of a work Schedule that enables communication
with the day department, the expectation of being able to control working hours, discrepancies
in work schedules that promote an ideal professional care environment, and predictable work
differences.
C. Emergency Vehicles and Demand Forecasting
Operations research is applied to aspects like room planning, emergency department staffing,
and long-term strategic planning to optimize healthcare delivery.
One critical issue in the healthcare industry pertains to the optimal placement of emergency
vehicles, a matter of life and death. The primary objective is to maximize coverage of the
population with minimal travel distance, ensuring swift hospital access. To address this,
researchers utilized Linear Programming to determine ambulance locations and bolstered their
findings with Simulation to assess effectiveness.
Furthermore, researchers developed a comprehensive Quantitative Demand Forecasting
Model. This model involves collecting historical data, analyzing trends, identifying demand
drivers, recognizing benchmarks, verifying existing conditions, formulating core assumptions
for population-based needs, establishing provider-level requirements, creating baseline
forecasts for future demand, and assessing predictions against changes in core assumptions.
This method aids in analyzing market trends and anticipating future healthcare needs to some
degree.
In rural areas, access to health services is a common problem, and several operations research
experts have employed the Integer Programming Model to tackle this challenge. Additionally,
in hospitals facing increased patient appointments and long waiting times, Queuing Theory has
been utilized to address issues such as last-minute appointment cancellations by patients.
D. Prevention of Diseases
Optimization challenges in disease prevention primarily revolve around vaccine selection.
Sewell and Jacobson (2003) introduced a vaccine selection algorithm designed to encompass
the entire immunization schedule. They devised an integer programming model to evaluate the
economic advantages of having combination vaccines readily available.
In a similar vein, Hall et al. (2008) tackled the issue of vaccine formulary in the context of
generic childhood immunization schedules. They formulated an integer programming model
to determine the maximum number of vaccines that can be administered without causing over-
immunization. To address this, they developed both an exact Dynamic Programming algorithm
and a randomized heuristic to solve the integer programming model efficiently.
Earnshaw et al. (2007) focused on resource allocation in HIV prevention and devised a linear
programming model aimed at enhancing previous allocation strategies.
Furthermore, Brandeau et al. (2003) employed non-linear optimization techniques in
combination with epidemic modeling to identify the optimal allocation of limited resources for
epidemic control in multiple non-interacting populations.
Conclusion:
In summary, the use of operations research (OR) in the healthcare sector has enormous potential
to raise the effectiveness, efficiency, and cost-effectiveness of healthcare services. OR provides
a methodical and data-driven approach to addressing the complex difficulties within healthcare
operations by optimising resource allocation, appointment scheduling, supply chain
management, and many other elements.
OR can improve decision-making, decrease waiting times, avoid pharmaceutical shortages, and
promote fast treatment by utilising mathematical models, simulations, and analytical tools.
Additionally, it improves the efficiency of telemedicine and home healthcare, as well as clinical
trials and drug research.
Additionally, OR can enhance long-term care facility management, educate healthcare policies
with evidence-based insights, and strike a balance between maintaining or improving care
quality while reducing healthcare costs. The systematic approach of operations research will
continue to be a useful tool for making data-informed decisions, optimising processes, and
ultimately improving the delivery of healthcare services to benefit both patients and healthcare
providers as the healthcare sector continues to evolve and face dynamic challenges. By using
a multidisciplinary approach, healthcare operations are made to be precisely tuned to satisfy
the constantly increasing needs of contemporary healthcare systems.
References:
1. Applications of Operations Research Techniques in Healthcare; Mehak Jain, Mudita Shah,
Naman Sadh, Naomi Marfatia, Nishit Khandelwal
2. Application of Operation Research in Healthcare Industry; Aryan Agrawal, Jinesh Jain, Mehak
Malhotra, Vinayak Rastogi, Samridhi Agarwal
3. [Link]
4. [Link]
5. [Link]
6. [Link]
7. [Link]
8. Chart: The Countries With The Most Hospital Beds | Statista