Many hospitals face the problem of insufficient capacity to meet demand for inpatient beds, especially during demand surges. This results in quality degradation of patient care due to large delays from admission time to the hospital until arrival at a floor. In addition, there is loss of revenue because of the inability to provide service to potential patients. A solution to the problem is to proactively transfer patients between floors in anticipation of a demand surge. Optimal reallocation poses an extraordinarily complex problem that can be modeled as a finite-horizon Markov decision process. Based on the optimization model, a decision-support system has been developed and implemented at Windham Hospital in Willimantic, Connecticut. Projections from an initial trial period indicate very significant financial gains of about 1% of their total revenue, with no negative impact on any standard quality of care or staffing effectiveness indicators. In addition, the hospital showed a marked improvement in quality of care because of a resulting decrease of almost 50% in the average time that an admitted patient has to wait from admission until being transferred to a floor.

Document Type


Publication Date


Publisher Statement

Copyright © 2009 INFORMS. This article first appeared in Operations Research 57, no. 2 (March/April 2009): 261-73. doi:10.1287/opre.1080.0584.

Please note that downloads of the article are for private/personal use only.