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
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.