Decision Modeling: Tools for Strategic Thinking

Abstract

For 10 years, the Decision Techtronics Group (DTG) has helped public organizations use decision modeling to improve group decision making. When the New York State Insurance Department faced the task of making recommendations to resolve the medical-malpractice crisis, it developed, with the help of DTG, a system dynamics simulation model and a multiattribute utility (MAU) model to analyze policy options. Decision makers assessed the short- and long-term impact of proposed policy changes and their utility to various stakeholders. The department was able to make sound recommendations to the state legislature. This case demonstrates that the successful application of modeling to strategic decisions requires (1) an understanding of the various modeling techniques, (2) the ability to diagnose a real problem and to select appropriate techniques (3) the willingness to rethink the problem in terms of the modeling techniques, and (4) the construction of models with full participation of the decision makers.