A revenue management approach for managing operating room capacity

The advanced scheduling of patients for elective surgeries is challenging when the operating room capacity usage by these procedures is uncertain. We study the application of some revenue management concepts and techniques to operating rooms for several surgical procedures performed in a multi-tier reimbursement system. Our approach focuses on booking requests for elective procedures, under the assumption that each request uses a random amount of time. We create and use a modified version of Belobaba's well-known EMSRb algorithm (Belobaba 1989) to decide on near-optimal protection levels for various classes of patients. Under the random resource utilization assumption, we decide, for each planning horizon, how much time to reserve for satisfying the demand coming from each class of patients, based on the type of surgical procedure requested and the patient's reimbursement level.