Service Substitution Research Articles

Migration of customers owing to a service substitution

Customers continuously migrate from legacy products to new substitutes as new technologies and products emerge. This article analyzes the migration of customers from a legacy product to a new technological substitute, based on customers’ historical activity data. The analysis constructs individual migration profiles and forecasts future migration behavior of each customer, as well as segmenting customers based on their migration patterns. Companies can use this analysis to forecast demand for legacy products and new substitutes, and to identify customers for targeted marketing campaigns. A case study illustrates the analysis.

The bus bridging problem in metro operations: conceptual framework, models and algorithms

Metro networks provide efficient transportation services to large numbers of travelers in urban areas around the World; any unexpected operational disruption can lead to rapid degradation of the provided level of service by a city’s public transportation system. In such instances, quick and efficient substitution of services is necessary for accommodating metro passengers including the widely used practice of “bridging” metro stations using bus services. Despite its widespread application, bus bridging is largely done ad-hoc and not as part of an integrated optimization procedure. In this paper we propose a methodological framework for planning and designing an efficient bus bridging network. Furthermore, we offer a set of structured steps and optimization models and algorithms for handling bus bridging problems.

Policy implications of market segmentation as a determinant of fixed-mobile service substitution: What it means for carriers and policy makers

The determination whether mobile and fixed telecommunications services operate in the same market not only affects business decision of service providers, but also has wide implications on public policy decisions pertaining to the means by which they should be regulated in the United States. This study conducts a two-stage cluster analysis implementing the American Customer Satisfaction Model on two datasets of 3251 and 5060 data points pertaining to mobile and fixed-line phone services, respectively, collected by the National Quality Research Center at the University of Michigan in order to determine whether the way consumers perceive these services can indicate as to their levels of substitutability. It concludes that different types of customers with different needs consume these products and offers policy makers some insight on how to further the penetration of mobile services.

USDL

Web services and Service-Oriented Computing is being widely adopted. In order to effectively reuse existing services, we need an infrastructure that allows users and applications to discover, deploy, compose, and synthesize services automatically. This automation can take place only if a formal description of the Web services is available. In this article we present an infrastructure using USDL (Universal Service-Semantics Description Language), a language for formally describing the semantics of Web services. USDL is based on the Web Ontology Language (OWL) and employs WordNet as a common basis for understanding the meaning of services. USDL can be regarded as formal service documentation that will allow sophisticated conceptual modeling and searching of available Web services, automated service composition, and other forms of automated service integration. A theory of service substitution using USDL is presented. The rationale behind the design of USDL along with its formal specification in OWL is presented with examples. We also compare USDL with other approaches like OWL-S, WSDL-S, and WSML and show that USDL is complementary to these approaches.

Optimal Planning of Ancillary Services for Reliable Power Balance Control

This paper presents an overview of a complex approach to optimal planning of ancillary services ensuring reliable power balancing of a transmission system in liberalized market conditions that is performed by a transmission system operator (TSO). To accomplish this goal analytical computations together with optimizations and Monte Carlo simulations are performed. The designed decision support tool serves the TSO not only for a year-ahead planning task but also for carrying out various analyses and sensitivity tests, e.g., how costs of ancillary services are related to the level of reliability. Attention is also paid to mutual substitutability of ancillary services and its impact on transmission system operation and corresponding expenses.

Economic Grand Rounds: A Self-Directed Care Model for Mental Health Recovery

Self-directed care programs give participants control over public funds to purchase services and supports for their own recovery. Data were examined for 106 individuals and showed that compared with the year before enrollment, in the year after enrollment, participants spent significantly less time in psychiatric inpatient and criminal justice settings and showed significantly better functioning. Of approximately $58,000 in direct expenditures by participants over 19 months of operation, 47% was spent on traditional psychiatric services, 13% on service substitutions for traditional care, 29% on tangible goods, 8% on uncovered medical care, and 3% on transportation. Early positive results of this pilot program support replication and evaluation elsewhere. (Psychiatric Services 59: 600–602, 2008)

Economic Grand Rounds: A Self-Directed Care Model for Mental Health Recovery

Self-directed care programs give participants control over public funds to purchase services and supports for their own recovery. Data were examined for 106 individuals and showed that compared with the year before enrollment, in the year after enrollment, participants spent significantly less time in psychiatric inpatient and criminal justice settings and showed significantly better functioning. Of approximately $58,000 in direct expenditures by participants over 19 months of operation, 47% was spent on traditional psychiatric services, 13% on service substitutions for traditional care, 29% on tangible goods, 8% on uncovered medical care, and 3% on transportation. Early positive results of this pilot program support replication and evaluation elsewhere.

Environmental Benefits from Mode Substitution: Comparison of the Environmental Impact from Aircraft and High-Speed Train Operations

ABSTRACT Many studies consider substitution of aircraft services with high-speed train (HST) services on short-haul routes desirable for environmental reasons. This paper empirically examined this perception by evaluating local air pollution (LAP) and climate change impacts from a flight and an HST service between London and Paris. Comparing the emissions, the impact, and the cost of damage from the aircraft journey with the HST journey, it was found that substituting an aircraft seat with an HST seat is beneficial. These benefits are likely to occur on all routes on which aircraft and HST substitution is likely to take place. Despite the many limitations in the evaluation of environmental impact, the analysis suggests that such an evaluation is valuable and provides important information.

Money Shocks in a Small Open Economy with Dollarization, Factor Price Rigidities, and Nontradeables

The impact of an unanticipated monetary shock in a small open economy with dollarization, factor price rigidities, and nontradeables is re-examined in an optimizing intertemporal general equilibrium model. The framework of an earlier study is extended to incorporate foreign real money balances into the representative agent's utility function and to account for the phenomenon of dollarization so characteristic of transition economies. The major finding is that in the event of small monetary shocks, the presence of dollarization does not alter the outcome that relates the sign of response of consumption, current account balance, and other macroeconomic variables to the difference between intertemporal and intratemporal elasticities of substitutions of the total consumption index. The solution also shows that the elasticity of intertemporal substitution of money services and the share of traded goods in total consumption - a proxy for openness of the economy - are the crucial parameters in determining the response and the possibility of overshooting of the model variables, with economic openness playing a stabilizing role for the econ-omy in the event of monetary shocks.

Valuing information technology infrastructures: a growth options approach

Decisions to invest in information technology (IT) infrastructure are often made based on an assessment of its immediate value to the organization. However, an important source of value comes from the fact that such technologies have the potential to be leveraged in the development of future applications. From a real options perspective, IT infrastructure investments create growth options that can be exercised if and when an organization decides to develop systems to provide new or enhanced IT capabilities. We present an analytical model based on real options that shows the process by which this potential is converted into business value, and discuss middleware as an example technology in this context. We derive managerial implications for the evaluation of IT infrastructure investments, and the main findings are: (1) the flexibility provided by IT infrastructure investment is more valuable when uncertainty is higher; (2) the cost advantage that IT infrastructure investment brings about is amplified by demand volatility for IT-supported products and services; (3) in duopoly competition, the value of IT infrastructure flexibility increases with the level of product or service substitutability; and (4) when demand volatility is high, inter-firm competition has a lower impact on the value of IT infrastructure.

Service Behavior and Quality Consistency in Virtualized Computing Environment

A unified framework based on Petri-net for the modeling of service behavior and QoS is proposed. Based on this framework a set of service consistency rules are derived to improve the accuracy of service discovery and to ensure the system consistency in service substitution. A middleware named SOBECA (service-oriented, behavior and capability support architecture) compatible with current Web services standards is developed to make a proof of concept of the framework. In SOBECA the service description is extended with behavior and quality

Task transfer: another pressure for evolution of the medical profession

Since the 1960s, Australian society and the medical profession have undergone enormous change. Our society has moved from a relatively homogeneous and conservative community, supported by limited government services, to one that is multicultural, focused on the individual and consumerism, and supported by extensive government programs, with health care a top public and political priority. A defining feature of contemporary society is its mistrust of institutions, professionals, public servants and politicians. The medical profession has changed from a cohesive entity, valuing generalism and with limited specialisation, to one splintered by ultra-specialisation and competing professional agendas. The medical workforce shortage and efforts to maintain the safety and quality of health services are putting acute pressure on the profession. Task transfer or role substitution of medical services is mooted as a potential solution to this pressure. This has the potential to drastically transform the profession. How task transfer will evolve and change medicine depends on the vision and leadership of the profession and a flexible pragmatism that safeguards quality and safety and places patient priorities above those of the profession.

"Learning" to Offer an Alternative to Military Service: Norm Adoption in Russia

When adopting Russia's current constitution in a nationwide referendum on December 12, 1993, Russian electorate also voted in favor of offering conscientious objectors (COs) an alternative to traditional military service. As stated in Article 59 (3) of constitution, the citizen of Russian Federation whose convictions and faith are at odds with military service . . . shall have right to substitution of an alternative civil service for military service.1It was ten years later, however, beginning on January 1, 2004, that Russian conscripts would be offered alternative otherwise guaranteed by constitution. Moreover, members of Duma declared that this part of Rights and Liberties of Man and Citizen (ch. 2 of constitution) should have duration of alternative service exceed that of traditional service-from a standard twenty-four months to thirty-six or even a full forty-two months (for those performing civil service within military and nonmilitary sectors, respectively).2The adoption of new law, which still leaves Russia open to criticism of discrimination, has clearly been a difficult and painful process for Russian policymakers. In this article, I trace origins of law and explain why it appeared when it did and why it appeared in shape that it did.The study proceeds in four main steps. First, drawing on what is a rapidly expanding body of literature, I briefly outline relevant theories on social learning. Employing a basic distinction between and complex learning, I explain how cognition may reflect two principally different processes of policy transformation-one in which means change, but underlying assumptions remain intact and one in which means change as fundamental values and belief systems are altered.3Second, I go over process leading to adoption of law. Well before 2002, strong pressure existed to pass legislation on issue but, as demonstrated here, various Duma majorities prevented this for more than eight years. Domestically, main source of-the pressure was Article 59 (3) itself, continued neglect of which was a constant reminder for critics of relatively illiberal nature of post-Soviet Russia.4 Internationally, it was primarily generated by Russia's membership application to-and subsequent acceptance into-the Council of Europe (CoE). The central role played by this organization is explained not only by strong human rights dimension of its work, but also because it remains only major European security organization of which Russia has actually earned membership.5Third, I link first two sections, offering answers to puzzles raised earlier. I suggest that law on alternative service is primarily product of a simple learning process. Although there seems to have been a growing recognition among Russian politicians concerning importance of meeting international standards of conduct, particular norm underlying offer of alternative service clearly has not been fully internalized. In fact, it seems that there was a conscious effort made to ensure that law meets a minimal interpretation of letter of earlier commitments only. The members of Duma, simply put, were more concerned about interests of Russia than about those of COs.This, I argue in final section, does not necessarily represent a failure on part of either domestic critics or international community. It marks a step in right direction, even if a small one, and should be welcomed. Once introduced, even for instrumental reasons, human rights norms often gain wider acceptance through a gradual process, raising their legitimacy and making it less likely that they will be rolled back.LearningThe underlying theme of this study is norm socialization. Depending on level of internalization, norms will have a constitutive effect (that is, define identity of actor) as well as a regulative effect (that is, shape behavior of actor). …

The effect of a subsidy policy on the utilization of community care services under a public long-term care insurance program in rural Japan

This cross-sectional study investigated the effect of an interim subsidy policy for low-income beneficiaries to buy home help services under Japanese long-term care insurance (LTCI) for the service utilization of home help and other community care services. Claims records during the period from October to December 2001 were reviewed to compare the monthly amounts for each service and out-of-pocket copayment for subsidized ( n = 137) and non-subsidized ( n = 124) beneficiaries. A multivariable linear regression analysis was conducted to control for age, gender, household size, length of care, and care eligibility level. Compared with the non-subsidized beneficiaries, the subsidized beneficiaries used 1.53 times as much home help service ( p < 0.001), and spent 0.70 times as much on out-of-pocket copayments ( p < 0.001), while they used fewer adult daycare services (0.71 times as much as the non-subsidized did, p = 0.063). The results strongly indicated that the interim subsidy for low-income beneficiaries alleviated the economic burden, but also resulted in service overuse and the substitution of home help services for other community care services. The policy implications of these findings were discussed.

Are Existing Global Scenarios Consistent with Ecological Feedbacks?

Scenarios can help planners and decision makers to think through uncertainties about the future and make decisions that are robust to a variety of possible outcomes. To develop useful scenarios we need to understand the main processes of relevance to the system of interest. Ecological processes, and the feedbacks that they can create between human actions and human well-being, are thought to be important for human societies. Current uncertainties over the long-term resilience of ecosystems and the substitutability of ecosystem goods and services can be translated into three alternative realities: ecosystems may be relatively brittle, relatively resilient, or largely irrelevant. Although these extremes are only rough characterizations of reality, they help us to focus our thinking about the possible outcomes of interactions between humans and the rest of the biosphere. Existing global scenarios can be categorized into a small number of families based on shared themes and assumptions about the future. Considering the internal consistency of four of the main scenario families in relation to the three alternative ecological realities suggests that all existing scenarios make strong, implicit assumptions about the resilience of ecosystems. After a detailed discussion of individual examples, we present a synthesis of the incorporation of ecology in existing scenarios. All current scenarios are inconsistent with at least one possible property of ecosystems and their likely interaction with society. The interrelationships between ecological reality, human views of ecosystems, and social responses to actual and perceived ecological change are complex. For the Millennium Ecosystem Assessment and future scenario exercises, we recommend that essential ecological assumptions should be made explicit to ensure that the details of each scenario are consistent with both the perceived and the actual degree of resilience of ecosystems.

Introducing coordinated care (2): evaluation of design features and implementation processes implications for a preferred health system reform model

The study investigated why the goals of the Australian Coordinated Care trials for clients with complex care needs were not achieved. Significantly higher health service use and costs were incurred in the absence of clear evidence of improved client health outcomes. The validity of assumptions underpinning trial design and the success of implementation at each step in application of the model were examined. There were failures in both design and implementation. Many clients did not require care coordination. The funds pooling arrangements contributed to limited possibilities for service substitution and training of GP care coordinators was inadequate. Trial design did not focus on either clinical guidelines or consumer empowerment. Furthermore, the expectations of the overall national trial were unrealistic both in trial design and expected outcomes given the rigidities and realities of the Australian health care system. Broader system reform in the form of funds pooling and health services planning at the regional level, based on large populations, may be a more effective means to address problems of care coordination and an inflexible supply system.

Accessing Capital: Learning to Live in the Real World

The unreal world of payment and capital financing of the last 40 years is rapidly coming to a close, and all guarantees of stability are in doubt. Although this seems like a bleak and heartless challenge to the accepted of U.S. hospitals, it represents just a taste of the discipline of the capital markets that has always been known and feared by the rest of corporate America. The principles that govern this new world order are simple. 1. All sources of capital demand returns comparable to those of equal risk investments. 2. Returns may vary in form, timing, and source as long as they are sufficient. 3. Dividends-whether cash or in kind-can only be paid out of economic profit. Translated to our healthcare environment, this means that (1) our money is not free or low cost, matter what the source; (2) our investments must promise clear and immediate returns or viable future options to convince the capital markets to finance us; and (3) the social dividends so central to our identity are in jeopardy if we are not successful (Silvers 2001). The well-worn slogan no margin, mission must be amended to read no margin, money, business, mission. BACKGROUND The first time I attempted to understand how healthcare capital investment really works was in my second year as a professor teaching in a healthcare executive program at the Harvard Business School in 1972. I ventured to New York to interview the chief financial officer (CFO) of one of the largest hospitals in the city with the intention of gathering teaching material. As a professor of corporate finance, I thought I knew something about the subject and figured that I could whip up a case that explored the financial decision-making process around some interesting investment proposal. I assumed that the process would be similar to that of the businesses I had known: identify potential positive return projects, evaluate them against financial and strategic criteria, determine the financing need implied in the aggregate by the acceptable criteria, and then compare that need against internal and external financing available under current conditions. While short-term capital restrictions might argue for deferral of good projects, turning down those that promised additional shareholder value just because they required external financing made economic sense. However, when I asked how the capital budgeting process worked, the CFO looked puzzled and replied that, once they had added up all the project requests, they talked to their investment banking firm to see what they could raise in a capital financing program. I responded that I understood the financing process but wanted to know how they made capital budgeting decisions. It quickly became clear that the hospital had real process. It accepted all projects that the markets would allow based on its general financial condition and current cash flow and debt coverage. At that time, with almost all of its payment based on cost, reimbursement of depreciation and interest was sufficient to cover almost any debt level. Raising funds was not a challenge. In essence, the discipline of the capital markets was completely submerged by the benign payment that guaranteed returns and eliminated financial risk. FINANCIAL RISK Even in recent years, in response to my question as to how to define financial risk, most CFOs respond that it comes from changes in government payment rather than service market conditions. Of course, the government does pose an environmental risk, but it is only one source. Loss of patient volume, substitution of services, or obsolescence of facilities-the sorts of risk factors that one would hear mentioned by CFOs in the general corporate sector-are growing or even dominant sources of risk to healthcare institutions. The two feature articles in this issue of Frontiers reflect these changes from the days when payment was fair (i. …

Ecosystem services of the tropical seascape: interactions, substitutions and restoration

The tropical coastal “seascape” often includes a patchwork of mangroves, seagrass beds, and coral reefs that produces a variety of natural resources and ecosystem services. By looking into a limited number of attempts at substitution and restoration of ecosystem services (e.g. artificial reefs, aquaculture in mangroves, artificial seawalls), we address the questions: (1) To what degree can technologies substitute for ecosystem services in the seascape? (2) How can ecosystem restoration reestablish not only the functions of direct value to humans, but also the ability of the systems to cope with future disturbance? Substitutions often imply the replacement of a function provided free by a solar powered, self-repairing resilient ecosystem, with a fossil-fuel-powered, expensive, artificial substitute that needs maintenance. Further, restoration usually does not focus on large-scale processes such as the physical, biological and biogeochemical interactions between mangroves, seagrass beds and coral reefs. Nonetheless, restoration might be the only viable management alternative when the system is essentially locked into an undesired community state (stability domain) after a phase-shift. We conclude that ecosystem services cannot be readily replaced, restored or sustained without extensive knowledge of the dynamics, multifunctionality and interconnectedness of ecosystems.

Industrial Ecology: Policy Potential and Research Needs

Over the past decade, a new approach to environmental analysis has developed. Although the scope and definition are not yet completely fixed, the new field of industrial focuses on reducing the environmental impacts of goods and services, on systems-based analysis of environmental problems, and on innovations that can significantly improve environmental performance. Industrial ecology has significant potential for U.S. environmental policy. But to establish a firm foundation for significant policy initiatives, there is a need for better understanding of the potential and limitations of a range of promising approaches including: (a) technological innovation, (b) voluntary and cooperative approaches to environmental management, (c) substitution of services for products, (d) recycling and reuse, (e) reduction in the amounts of materials used in products, and (f) substitution of scarce resources with those that are plentiful.

A Case for Community and Hospital-Based Long-Term Care Facilities in Saudi Arabia

A Case for Community and Hospital-Based Long-Term Care Facilities in Saudi Arabia