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A Methodology for Determining a Hospital's Expected Costs for Changes in Patient Load and Service Mix


  • Peter Duchessi

    (School of Business, State University of New York, Albany, New York 12222)


This paper describes a methodology that demonstrates how specific types of patient/cost data can be used to construct a model that predicts the expected increase or decrease in costs associated with a change in patient load, expansion of an existing patient service department, closure of an existing patient service department, or installation of a specific patient service department. Data from a group of New York State hospitals are used to illustrate the development of the model's components that produce cost estimates. A computer-based model is used to demonstrate the methodology's application to a specific hospital. Additionally, a number of program runs that simulate the cost impact of patient load and/or service mix changes are presented. Finally, the methodology's potential management and regulatory applications are discussed.

Suggested Citation

  • Peter Duchessi, 1987. "A Methodology for Determining a Hospital's Expected Costs for Changes in Patient Load and Service Mix," Management Science, INFORMS, vol. 33(1), pages 73-85, January.
  • Handle: RePEc:inm:ormnsc:v:33:y:1987:i:1:p:73-85

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    Cited by:

    1. Chowdhury, Sanjib & Miles, Grant, 2006. "Customer-induced uncertainty in predicting organizational design: Empirical evidence challenging the service versus manufacturing dichotomy," Journal of Business Research, Elsevier, vol. 59(1), pages 121-129, January.
    2. Cote, Murray J., 1999. "Patient flow and resource utilization in an outpatient clinic," Socio-Economic Planning Sciences, Elsevier, vol. 33(3), pages 231-245, September.

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    health care: hospitals; costing;


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