Can my hospital cost-effectively match demand and capacity without addressing artificial variability?
The only time that matching capacity (physical and staffing) to demand is an appropriate solution is when demand variation is entirely random in nature, which is typically not the case in hospitals. Artificial swings amplify peaks and valleys in daily volume. Typically, hospitals cannot afford to always staff for peak demand – this leads to waste during all the times when demand is less than peak. The alternate approach of staffing for average demand leads to stress on providers, as well as concerns about quality of care, when demand exceeds the average (about half the time). Finally, flexing capacity to match demand variation, apart from being operationally challenging, is inefficient due to the artificially exaggerated demand peaks. The only appropriate solution is to eliminate artificial peaks, and then build / staff to manage natural variations in demand.
