Analysis of hospital capital decision alternatives: a priority assignment model

Area of Science:

• Healthcare Management
• Decision Science
• Operations Research

Background:

• Systematic capital decision analysis is often lacking in the not-for-profit hospital sector.
• Subjective criteria are typically integrated vaguely into decision-making processes.
• Existing quantitative methods struggle to incorporate non-objective decision factors.

Purpose of the Study:

• To examine a novel priority assignment model for capital decision alternatives.
• To integrate subjective judgments mathematically into decision analysis.
• To improve capital allocation in the hospital industry.

Main Methods:

• The model utilizes judgmental transitivity to assess the quality of subjective inputs.
• It mathematically integrates quality-adjusted judgmental information.
• Operational aspects and application examples are provided.

Main Results:

• The proposed model offers a structured approach to incorporating qualitative factors.
• It enhances the rigor of capital decision-making by quantifying subjective judgments.
• Demonstrates practical application in a hospital setting.

Conclusions:

• The priority assignment model provides a robust framework for capital budgeting in healthcare.
• It addresses the challenge of integrating non-objective criteria into financial analysis.
• Facilitates more informed and defensible capital allocation decisions in hospitals.