Quantitative analysis of investment allocation over various resources of health care systems by using views of product lines

Abstract

Hospitals can be viewed as service enterprises, of which the primary function is to provide specific sets of diagnostic and therapeutic medical services to individual patients. Each patient has certain diagnosis and therapeutic attributes in common with some other patients. Thus, patients with similar medical attributes could be ‘processed’ in one ‘product line’ of medical services, and individual treatments for patients within one ‘product line’ can be regarded as incurring identical consumption of health care resources. This article presents a theoretical framing for resource planning and investment allocation of various resources from a macro perspective of costs that demonstrates the need to plan capacity at the disaggregated resource level. The result of a balanced line (‘optimal’) is compared with an alternative scheme of ‘the same ratio composing of resources’ under the same monetary constraints. Thus, it is demonstrated that planning at the disaggregated level affords much better use of resources than achieved in common practice of budget control by simple percentage increase/decrease in distributing a financial vote.