Flexibility and real options analysis in emergency medical services systems using decision rules and multi-stage stochastic programming

Abstract

A novel approach to EMS infrastructure systems design, planning, and operations under long-term uncertainty is introduced based on multi-stage stochastic programming and decision rules, accounting for strategic flexibility (also known as real options-RO). Different from standard RO analysis, the approach mimics real-world decision-making by exercising flexibility based on conditional-go decision rules. The objective is to minimize the expected total costs over the system's life cycle, and the outputs are the optimal initial configuration and decision rules. A flexible solution provides lower expected cost than stochastically optimal rigid solutions, especially valuable when required incident coverage rate is > 95%.

Strategic flexibility analysis in emergency medical service systems using decision rules

“…Reference [11] analyzed a multi-allocation problem regarding a single facility. Little research has considered using flexibility to tackle the uncertainty in EMS systems, except for [3], which developed a multi-stage stochastic programming model incorporating the flexibility and managerial decision rules to deploy emergency resource over time and space.…”

“…This section introduces the mathematical formulation of the multi-stage stochastic programming model, and also explicitly illustrates the hybrid algorithm for efficiently solving such problem. This resource allocation model is basically presented in [3]. For simplicity, only the general form is discusses in this paper.…”

“…More specifically, an EMS system deployed in view of "average" or "most likely" scenario prediction may perform badly in the reality due to a phenomenon known as "Flaw of Average" [2]. To tackle this issue, and to pro-actively deal with uncertainty, Reference [3] proposed an approach to manage the system's capacity and configuration in the face of future possibilities. The method is built upon the idea of flexibility in engineering design, which provide the "right, but not the obligation, to change the system easily in the face of uncertainty" [4].…”

A lean-TOC approach for improving Emergency Medical Services (EMS) transport and logistics operations

“…Soriano-Meier et al, 2011;Chalice 2007;Joint Commission on Accreditation of Healthcare Organizations 2006;Brandao 2009), the specific implementation of lean thinking to address some of the transport and logistics challenges of Emergency Medical Services (EMS) is almost non-existent. Transport and logistics EMS operating processes can be considered a specialised transportation activity in which the life of patients is at risk (Zhang et al, 2017), hence their agility capability is of major public concern. The fundamental responsibilities of EMS systems are to provide urgent medical care, such as pre-hospital care, and to transport the patient to the hospital if needed (Fitch et al, 2015).…”

“…Recently, various research studies have focused on improving the transport and logistics performance of EMS systems (e.g. Meilinda et al, 2018;Zhang and Cardin, 2017;He and Liu, 2015;Blackwell and Kaufman, 2002;Caunhye et al, 2012). However, like 'traditional' transport and logistics problems, these have been mainly addressed through mathematical modelling, operations research, and simulation methods.…”