Economic Models - Convex Optimization

168 Anna-Maria Mouza
The solution obtained with the re-stated restrictions satisfies all requirements.
Now, total expenses sum up to 1,857,817.125. It has to be underlined,
however, that since the value of the deviational variable d43 − is
70,317.2, it is implied that total gross profits undergo a reduction of about
9.38% (from 750,000 to 679,682.8), which is a bit higher when compared
to the corresponding percentage (∼6%) of total salary reduction. Nevertheless,
the results provide a sound basis to achieve an optimal solution, in the
sense that it is acceptable by all people involved without any violations of
the existing rules.
8. Conclusions
Many clinics like the one presented here benefit the patients, the health
service in a convenient way, and help attain consistency and continuity
of treatment. These achievements are heavily dependent on a successful
budget planning. The characteristics of a model of this type for a clinic
are based upon many factors, such as the type of the clinic, the location,
the size, the medical specialty, etc. Hence, it is difficult to design a general
model that can be applied to all types of clinics. However, once a budget
planning model has been developed, it can be easily modified at a later
stage to fit many other types of clinics. With this in mind, I consider in this
paper an orthopedic clinic and implemented a model designed for a fiveyear
planning period, using the goal programming approach of aggregate
budget planning for this particular health care unit. To start with, the goals
and the relevant priorities are set in advance, to formulate the corresponding
goal programming model. The solution obtained is operational in the sense
that, through the analysis of resource requirements, the acceptable charge
per patient, the desired level of gross profits, the claimed rate of salary
increases by the employees, and the trade-offs among the set of goals are
achieved with a minimum sacrifice. The model shows that this sacrifice is
negotiable between different sides, so that the business manager can finally
establish an aggregative budget planning with the best perspectives, since
the realization of a fair wage policy can be obtained through using the
composite index, introduced in this paper.
References
Charnes, A and W Cooper (1961). Management Models and Industrial Applications of
Linear Programming (Vols. 1 and 2). New York: Wiley.
Everett, JE (2002). A decision support simulation model for the management of an elective
surgery waiting system. Health Care Management Science 5, 89–95.