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The hospital census problem: ways to fill hospital beds
Health Care Management Review
|January 7, 1980
Summary
Excessive hospital capacity intensifies competition, leading to a zero-sum economic game. Hospitals gain market share only by reducing occupancy at competing facilities.
Area of Science:
- Healthcare Management
- Health Economics
- Hospital Administration
Background:
- The hospital industry faces significant challenges due to overcapacity.
- This excess capacity fuels intense competition among healthcare providers.
Purpose of the Study:
- To analyze the competitive dynamics in hospital markets driven by capacity.
- To understand the economic implications of hospital overcapacity on market share.
Main Methods:
- Qualitative analysis of hospital industry competition.
- Economic modeling of hospital bed occupancy and market share.
Main Results:
- Increased hospital bed occupancy in one facility correlates with decreased occupancy in others.
- Economic gains for a hospital are often at the direct expense of competitors.
Conclusions:
- Hospital overcapacity creates a highly competitive environment where gains are redistributed rather than created.
- Strategies focusing solely on increasing occupancy without addressing capacity may lead to market instability.