Reform Simulation Modeling

Center for Healthcare Economics and Policy

May 11, 2015

In order to compete in today’s dynamic healthcare environment, hospitals must change the way they deliver healthcare services. Already operating with constrained resources, hospitals must ensure that reforms under consideration will deliver the benefits expected. Trial and error can be a costly option and is not viable. A better approach, Reform Simulation Modeling, enables hospitals to simulate a change to determine if it will deliver the benefits expected and to assess unanticipated effects that may occur. Typically, hospitals don’t have the expertise or modeling tools necessary to build and run reform simulations. The Center for Healthcare Economics and Policy (“the Center”) within FTI Consulting provides simulation experts who draw upon extensive experience in providing healthcare modeling solutions.

Discrete Event Simulation Background

In the constantly changing healthcare industry, hospitals struggle to address operational issues – how should patients be routed, how many nurses should be made available, how can MRIs be used most effectively. Hospitals use Discrete Event Simulation (DES) modeling to improve efficiencies, perform basic capacity planning, determine numbers of beds and staff required, and evaluate strategies to reduce ED wait times.

With DES, hospitals can model its operations and capacity, accounting explicitly for labs, beds, departments, wards, ambulances, pharmacies, ORs, EDs, ICUs, physicians, nurses, administrators, pharmacists, and other hospital resources. The objective of a DES model is to replicate hospital operations, as completely and accurately as possible, including all of its major services, resources, personnel, and equipment. With a DES model, the hospital can test different configurations to identify areas where the hospital can enhance its productivity and save money and increase value.

The Reform Simulation Model

The Center has designed its DES model to address larger issues of healthcare reform and strategic change. Using the model, we can replicate detailed operations of a specific hospital or a set of hospitals or facilities as a baseline and then simulate the effect on operations and financials of major changes in utilization. Examples of major changes include:

  • Re-alignment of inpatient care to more cost-effective out-of-hospital care facilities
  • Implementation of specific models of care and care coordination
  • Initiatives to reduce avoidable inpatient admissions
  • Initiatives to reduce avoidable ED episodes
  • Rationalization of hospital programs across newly acquired and existing system hospitals
  • Additions, expansion, reduction or elimination of particular services lines
  • Changes in physician referrals either through physician practice acquisitions or loss

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