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South Carolina Health Alliance  

In 1989, IMS Quantum (then Integrated Management System, Inc.) was engaged by the South Carolina Hospital Association (now the South Carolina Health Alliance) to develop a preliminary model concerning the allocation of hospital resources as an addendum to a grant proposal to the Robert Wood Johnson Foundation. The Integrated Decision Model was designed to compute the revenues generated by a series of thirteen hospital services as a result of a given allocation of resources. In the case of this simplified model, the resource under consideration was hospital beds. This general resource was divided into several categories: acute care, intensive care, long-term care, and unused beds.

Patients were grouped into six pay classes: Medicare, Medicaid, Blue Cross/Blue Shield, Commercial, Self-pay, or Other. Revenues could be computed for the patients that utilize a given service according to the distribution of patients among the pay classes and the associated deductions associated with each class. Excess revenues for each service were computed based on ancillary expenses, direct salaries and wages, and indirect expenses.

The usage of beds was then computed based on the number of patients that used each service and the percent of those patients that used each resource category. Actual utilization of each resource in terms of bed-days was then compared to a maximum possible utilization based on the number of days the resource was available.

Even with such a simple and relatively unintegrated model, general issues could easily be elucidated. With only a small amount of further development, the model could have been a powerful tool in optimizing the allocations of resources to maximize service effectiveness and efficiency.

Such complex mixes of different classes of patients, different categories of resources, and a variety of resource utilization rates makes the optimal allocation of resources a difficult problem without some kind of quantitative tool to aid hospital administrators. Once an allocation is made, tools are needed to track the effectiveness of that allocation. The rationale for any allocation must also be communicated to top management.

IMS Quantum provides management with decision and planning tools to balance goals with resources in complex operational and market settings. These models allow the communication of complex strategies to others and the tracking of the effectiveness of those strategies.

 
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