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Locating specialized service capacity in a multi-hospital network


  • Mahar, Stephen
  • Bretthauer, Kurt M.
  • Salzarulo, Peter A.


Multi-hospital systems have become very common in today's healthcare environment. However, there has been limited published research examining the opportunities and challenges of pooling specialized services to a subset of hospitals in the network. Therefore, this paper considers how hospital networks with multiple locations can leverage pooling benefits when deciding where to position specialized services, such as magnetic resonance imaging (MRI), transplants, or neonatal intensive care. Specifically, we develop an optimization model to determine how many and which of a hospital network's hospitals should be set up to deliver a specialized service. Importantly, this model takes into account both financial considerations and patient service levels. Computational results illustrate the value of optimally pooling resources across a subset of hospitals in the network versus two alternate approaches: (1) delivering the service at all locations and requiring each site to handle its own demand, or (2) locating the service at one hospital that handles all network demand.

Suggested Citation

  • Mahar, Stephen & Bretthauer, Kurt M. & Salzarulo, Peter A., 2011. "Locating specialized service capacity in a multi-hospital network," European Journal of Operational Research, Elsevier, vol. 212(3), pages 596-605, August.
  • Handle: RePEc:eee:ejores:v:212:y:2011:i:3:p:596-605

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    References listed on IDEAS

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    Cited by:

    1. Daniel McFadden & Carlos Noton & Pau Olivella, 2015. "Minimum coverage regulation in insurance markets," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(3), pages 247-278, August.
    2. Cardoso, Teresa & Oliveira, Mónica Duarte & Barbosa-Póvoa, Ana & Nickel, Stefan, 2016. "Moving towards an equitable long-term care network: A multi-objective and multi-period planning approach," Omega, Elsevier, vol. 58(C), pages 69-85.
    3. Cruz, Antonio Miguel & Haugan, Gregory L. & Rincon, Adriana Maria Rios, 2014. "The effects of asset specificity on maintenance financial performance: An empirical application of Transaction Cost Theory to the medical device maintenance field," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1037-1053.
    4. Ross, Anthony & Khajehnezhad, Milad & Otieno, Wilkistar & Aydas, Osman, 2017. "Integrated location-inventory modelling under forward and reverse product flows in the used merchandise retail sector: A multi-echelon formulation," European Journal of Operational Research, Elsevier, vol. 259(2), pages 664-676.
    5. Mohammadi, M. & Dehbari, S. & Vahdani, Behnam, 2014. "Design of a bi-objective reliable healthcare network with finite capacity queue under service covering uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 72(C), pages 15-41.
    6. Sahar K. Elkady & Hisham M. Abdelsalam, 2016. "A modified multi-objective particle swarm optimisation algorithm for healthcare facility planning," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 10(1), pages 1-22.


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