1st Australian International Conference on Industrial Engineering and Operations Management

Using System Dynamics Modeling to Improve the Financial Performance of Rural Hospitals

Chamila Dissanayake, Olufunke Oladimeji & Dinesh Pai
Publisher: IEOM Society International
0 Paper Citations
Track: Healthcare Systems

Rural hospitals are a crucial component of the US healthcare system as more than half of all US hospitals located in hospital regions considered as rural. Rural hospitals are faced with many challenges including low patient volumes, geographic isolation, hindrances for attracting and retaining skilled employees, and the lack of access to capital compared to their urban counterparts. Further, rural hospitals are typically more vulnerable to the effects from its rural operating environments such as: the declining population; economic stagnation; disproportionate number of elderly, poor, and underinsured residents; and high rates of chronic illness. These issues directly impact the financial performance and stability of the rural hospitals threatening their survival. Nonetheless, it is critical to maintain the rural hospital network, as one in five Americans rely on their services. This research is thus having the objective of formulating a methodology to identify systemic issues related to the financial performance of rural hospitals. The findings lead us to systematically arrive at improvement recommendations. We use Pennsylvania hospital data from 2000-2020 to demonstrate the methodological application. Initially, we identify if the Pennsylvania rural hospitals are having significantly different performances than the urban hospitals. As part of our methodology, we employ descriptive, statistical, and visual analyses to apprehend the rural hospital performance over the two-decades, and to unveil potential causal relationships. Then, we use the system dynamics (SD) modeling and analysis approach to verify and explain the significant causal relationships. The methodological demonstration ends with the recommendations for improving rural healthcare hospital systems, which are based on the SD model analysis results.

Published in: 1st Australian International Conference on Industrial Engineering and Operations Management, Sydney, Australia

Publisher: IEOM Society International
Date of Conference: December 21-22, 2022

ISBN: 979-8-3507-0542-3
ISSN/E-ISSN: 2169-8767