Minimization Cost of

Hospital (PIMS)

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 • Efficient resource allocation is paramount in
healthcare management for optimizing operations
while staying within budget constraints.
• Balancing quality patient care with cost control is a
significant challenge.
• The Hospital Cost Minimization Linear Programming
Introduction Model offers a systematic approach to address
these challenges.
• This model takes into account crucial factors, such
as staffing, equipment, overhead, bed capacity, and
average length of stay (LOS).
• In this presentation, we will explore how this model
can enhance healthcare management by ensuring
cost-effective and high-quality healthcare services.
Objectives

The primary objectives of this model is:

• To minimize the total cost associated
with operating the hospital.
Decision
Variables
• Staffing (Xsi ): Number of full-time equivalent
staff members in specific categories (e.g.,
doctors, nurses).
• Equipment (Xej ): Number of specific types of
medical equipment units (e.g., MRI machines).
• Overhead (Xo ): Overhead costs, including
utilities, maintenance, and administrative
expenses.
• Average Length of Stay (L): Average length
of stay for patients in the hospital.
 Objective Function

• Minimize Total Cost (Z): This function

minimizes the total cost, which includes
staffing costs, equipment costs, overhead
costs, and the cost associated with the
average length of stay.
• Z=∑i Csi Xsi +∑j Cej Xej +∑Cl L+O

• Parameters would be estimated using Multiple

Linear Regression (Dataset to be determined)
 • Budget Constraint:
• Ensures the total cost of hospital operations doesn't exceed the allocated budget
(B).
• Staffing Constraints:
• Specifies minimum and maximum staffing levels for each staff category to
maintain essential services.

Constraints • Equipment Constraints:

• Sets minimum and maximum equipment levels for specific types to ensure the
availability of essential equipment.
• Average Length of Stay Constraint:
• Maintains the hospital's average LOS within an acceptable range, preventing
patients from leaving too early or staying longer than necessary.
• Non-Negativity Constraints:
• Ensures that decision variables are non-negative, preventing negative values for
staffing, equipment, overhead, bed capacity, and LOS.
 • Budget Constraint: If the budget is
$1,000,000, the constraint is:

Example
• Cs1 Xs1 +Cs2 Xs2 +Ce1 Xe1 +Ce2 Xe2
+Co Xo +Cl L≤1,000,000

Constraints • Staffing Constraints: e.g., Xs1 ≥ 10 for a

minimum of 10 doctors.
(Constraints to be • Equipment Constraints: e.g., Xe1 ≥3 for
refined using SOPs, a minimum of 3 MRI machines.
Regulations, Guidelines • Average Length of Stay Constraint:
and Best Practices) e.g., L≥4 and L≤7 for LOS within a
desired range.
• Non-Negativity Constraints: e.g., Xs1
≥0, Xe2 ≥0, etc.