Product line management for health care system: Theoretic capacity planning over various resources

Hospitals can be viewed as service enterprises, whose products are specific sets of medical services provided to individual patients. It indicates that a hospital in theory has a product line as extensive as the number of patients it serves, however, each patient has certain diagnosis and therapeutic attributes in common with some other patients. Thus, patients with similar medical attributes could be ‘processed’ in a single ‘product line’, which means treatment process of these patients can be regarded as process of medical resource consumption at average level of this patient group. Based on this assumption, in this paper, we propose a model to analyze theoretic capacity balance and optimal investment allocation over various medical resources. This paper argues the mismatch between demand and provision of health care service is not only relevant to capacity lack, but also reflect inappropriate capacity allocation over various health care resources.