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The Timing of Staffing Decisions in Hospital Operating Rooms: Incorporating Workload Heterogeneity into the Newsvendor Problem

Author

Listed:
  • Biyu He

    (Amazon.com Inc., Seattle, Washington 98109)

  • Franklin Dexter

    (Department of Anesthesia, University of Iowa, Iowa City, Iowa 52242)

  • Alex Macario

    (Department of Anesthesia, Stanford University School of Medicine, Stanford, California 94305)

  • Stefanos Zenios

    (Graduate School of Business, Stanford University, Stanford, California 94305)

Abstract

We study the problem of setting nurse staffing levels in hospital operating rooms when there is uncertainty about daily workload. The workload is the number of operating room hours used by a medical specialty on a given day to perform surgical procedures. Variable costs consist of wages at a regular (scheduled) rate and at an overtime rate when the realized workload exceeds the scheduled time. Using a newsvendor framework, we consider the problem of determining optimal staffing levels with different information sets available at the time of decision: no information, information on number of cases, and information on number and types of cases. We develop empirical models for the daily workload distribution in which the mean and variance change with the information available. We use these models to derive optimal staffing rules based on historical data from a U.S. teaching hospital and prospectively test the performance of these rules. Our numerical results suggest that hospitals could potentially reduce their staffing costs by up to 39%-49% by deferring staffing decisions until procedure type information is available. The results demonstrate how data availability can affect a newsvendor's performance. The systematic approach of empirical modeling presented in the paper can be applied to other newsvendor problems with heterogeneous sources of demand.

Suggested Citation

  • Biyu He & Franklin Dexter & Alex Macario & Stefanos Zenios, 2012. "The Timing of Staffing Decisions in Hospital Operating Rooms: Incorporating Workload Heterogeneity into the Newsvendor Problem," Manufacturing & Service Operations Management, INFORMS, vol. 14(1), pages 99-114, January.
  • Handle: RePEc:inm:ormsom:v:14:y:2012:i:1:p:99-114
    DOI: 10.1287/msom.1110.0350
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tian Bai & Samuel N. Kirshner & Meng Wu, 2021. "Managing Overconfident Newsvendors: A Target‐Setting Approach," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 3967-3986, November.
    2. Mengyu Guo & Su Wu & Binfeng Li & Jie Song & Youping Rong, 2016. "Integrated scheduling of elective surgeries and surgical nurses for operating room suites," Flexible Services and Manufacturing Journal, Springer, vol. 28(1), pages 166-181, June.
    3. Soham Ghosh & Sujay Mukhoti, 2023. "Non-parametric generalised newsvendor model," Annals of Operations Research, Springer, vol. 321(1), pages 241-266, February.
    4. Sandeep Rath & Kumar Rajaram, 2022. "Staff Planning for Hospitals with Implicit Cost Estimation and Stochastic Optimization," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1271-1289, March.
    5. Liu, Congzheng & Letchford, Adam N. & Svetunkov, Ivan, 2022. "Newsvendor problems: An integrated method for estimation and optimisation," European Journal of Operational Research, Elsevier, vol. 300(2), pages 590-601.
    6. Linda V. Green & Sergei Savin & Nicos Savva, 2013. "“Nursevendor Problem”: Personnel Staffing in the Presence of Endogenous Absenteeism," Management Science, INFORMS, vol. 59(10), pages 2237-2256, October.
    7. Narges Hosseini & Kevin Taaffe, 2015. "Allocating operating room block time using historical caseload variability," Health Care Management Science, Springer, vol. 18(4), pages 419-430, December.
    8. Farbod Farhadi & Sina Ansari & Francisco Jara-Moroni, 2023. "Optimization models for patient and technician scheduling in hemodialysis centers," Health Care Management Science, Springer, vol. 26(3), pages 558-582, September.
    9. Andrew F. Siegel & Michael R. Wagner, 2021. "Profit Estimation Error in the Newsvendor Model Under a Parametric Demand Distribution," Management Science, INFORMS, vol. 67(8), pages 4863-4879, August.
    10. Shanshan Qiu & Ratna Chinnam & Alper Murat & Bassam Batarse & Hakimuddin Neemuchwala & Will Jordan, 2015. "A cost sensitive inpatient bed reservation approach to reduce emergency department boarding times," Health Care Management Science, Springer, vol. 18(1), pages 67-85, March.
    11. Sandeep Rath & Kumar Rajaram & Aman Mahajan, 2017. "Integrated Anesthesiologist and Room Scheduling for Surgeries: Methodology and Application," Operations Research, INFORMS, vol. 65(6), pages 1460-1478, December.
    12. Masoud Kamalahmadi & Kurt M. Bretthauer & Jonathan E. Helm & Alex F. Mills & Edwin C. Coe & Alisa Judy-Malcolm & Areeba Kara & Julian Pan, 2023. "Mixing It Up: Operational Impact of Hospitalist Caseload and Case-Mix," Management Science, INFORMS, vol. 69(1), pages 283-307, January.
    13. Pirayesh Neghab, Davood & Khayyati, Siamak & Karaesmen, Fikri, 2022. "An integrated data-driven method using deep learning for a newsvendor problem with unobservable features," European Journal of Operational Research, Elsevier, vol. 302(2), pages 482-496.
    14. R. K. Jha & B. S. Sahay & P. Charan, 2016. "Healthcare operations management: a structured literature review," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 43(3), pages 259-279, September.
    15. Hamsa Bastani & Mohsen Bayati, 2020. "Online Decision Making with High-Dimensional Covariates," Operations Research, INFORMS, vol. 68(1), pages 276-294, January.
    16. David C. Chan, Jr., 2015. "The Efficiency of Slacking Off: Evidence from the Emergency Department," NBER Working Papers 21002, National Bureau of Economic Research, Inc.
    17. Samuel N. Kirshner & Brent B. Moritz, 2023. "For the future and from afar: Psychological distance and inventory decision‐making," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 170-188, January.
    18. David C. Chan, 2018. "The Efficiency of Slacking off: Evidence From the Emergency Department," Econometrica, Econometric Society, vol. 86(3), pages 997-1030, May.
    19. Diwas Singh KC & Stefan Scholtes & Christian Terwiesch, 2020. "Empirical Research in Healthcare Operations: Past Research, Present Understanding, and Future Opportunities," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 73-83, January.
    20. Pinar Keskinocak & Nicos Savva, 2020. "A Review of the Healthcare-Management (Modeling) Literature Published in Manufacturing & Service Operations Management," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 59-72, January.

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