Friday, 29 April 2011

Less is Better; A cure for Dutch healthcare

This week a wellness centre of the North Star Alliance visited ORTEC headquarters in Gouda. Walking through the wellness centre and listening to the stories on the care offered by North Star to truck drivers, sex workers and local communities along the traffic corridors of sub-Saharan Africa, I realised that we are very fortunate to live in the Western world. Basic healthcare isn’t a top of mind topic for us; it has been arranged very well. Maybe it’s even a bit overdone? Reading the papers seems to confirm that. In nearly every country in Europe rising costs of healthcare is a main topic for the government. Main reasons for ever rising healthcare costs are increase in life expectancy, welfare increase and an increasing number of illnesses that can be cured due to innovation. The Dutch government also attempts to reduce expenditure in healthcare. But much of the political debate is about believes and less about facts.

To illustrate the quality of the Dutch healthcare system, let’s have a look at the accessibility of a hospital bed. A study from 2006 shows that for the European Union, 48% of the inhabitants can reach a hospital within 20 minutes. For the Netherlands this is even 70%, which is far above that EU figure. The travel distance to the closest hospital for a person living in the Netherlands is at most 12 KM for 80% of the population. Average distance travelled is 9.7 kilometres with the maximum distance to a hospital bed close to 50km for people living on the West Frisian Islands. The total number of hospital beds in the Netherlands is 52.714 which results in a hospital bed for every 314 inhabitants, given a total number of inhabitants of 16.5 million (all 2009 figures taken from http://www.dutchhospitaldata.nl/ ). When looking at the distribution of people per hospital bed on hospital level, something interesting comes forward. The number of people per hospital bed varies per hospital from 150 to 1230 with an average of 411! This smells like under and over utilisation of valuable assets, probably due to poorly located hospitals. Room for improvement!

In healthcare, as in any other industry, the implications of poor location decisions or too many or too few locations will result in increased expenses or poor service. If too many locations are deployed, capital costs, staffing costs and inventory carrying cost will be high. If too few locations are used service will degrade. Even if the number of hospitals is optimal, poorly chosen locations will impact service. Poor location decisions in healthcare go beyond cost. If too few hospitals are utilized or if they are poorly located, it will increase mortality and morbidity. So, great care must be taken in making location decisions in healthcare, assuring accessibility. Fortunately Operations Research offers all kinds of models that can assists in making that decision fact based.

To improve the utilisation of the Dutch hospital beds I constructed a math model to look for hospitals that could be closed without degrading the accessibility of hospital beds. So, in the optimised situation still at least 80% of the Dutch travel at most 12 kilometres to a hospital bed. Closing a hospital will reduce the number of available beds and therefore increase utilisation of others. This probably will also increase utilisation of expensive medical equipment like MRI, operating theatres and hospital staff. To make sure that hospitals don’t get overcrowded the model makes sure that utilisation of hospital beds in the optimised situation cannot rise above the maximum utilisation of the current situation. Besides increasing utilisation and productivity, closing hospitals will reduce capital costs and inventory carrying cost. These all together will make healthcare cheaper.

With the model I was able to identify 9 hospitals, out of 93, that could be closed without degrading accessibility. Most of the hospitals that can be closed lie in the west part of the Netherlands, which is not a coincidence. In that region there are many hospitals available which reduces the utilisation of the available beds in that region. Closing them won’t harm the accessibility to a hospital bed because of other hospitals in the vicinity. In the improved setting, still at least 80% of the Dutch need to travel at most 12 kilometres to reach a hospital bed. The spread in utilisation of beds decreases, it runs from 154 to 1181 with an average of 433, which is a 5% improvement. The average distance travelled to reach a hospital bed increases with only 3% to 10.0 kilometres.

So even when maintaining the very high level of accessibility to hospital care there is room for improvement. With the use of Operations Research the debate on healthcare costs can become fact based. Reviewing the current situation based on facts helps getting a clear view on current performance and directs the search for improvements. The optimisation techniques from Operations Research will help find the improvements that reduce cost without degrading our high level of accessibility in Healthcare. Above all they will help improve care in Third World countries.
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