Friday, February 24, 2012

Monte Carlo simulation examples in healthcare

I have written about examples of Monte Carlo simulation in the past. For a recent presentation on Monte Carlo simulation and stochastic optimization using Oracle Crystal Ball, I did some research on using Monte Carlo (MC) simulation in health-care. This blog post covers a few such references and applications I have seen so far.

From my limited research, there seems to be three major types of uses of MC simulation in health-care industries.
  • It seems that large (or small) health-care organizations are using MC simulation and stochastic optimization for better understanding and managing their budgets in various departments. That makes sense, since cost control is one of the main thrusts of health-care systems nationwide.
    • I have seen quite a few articles on using MC simulation in the context of managing preventive care in mental health situations. The article from SAMSHA (The Substance Abuse and Mental Health Services Administration) I mention later is a great example.
  • A few companies, which are manufacturers of health-care equipments, are using MC simulation in the manufacturing context, as in DFSS (Design for Six-Sigma), process capability optimization etc.
  • Finally, a few other companies are using MC simulation for controlling parameters of certain health-care processes, e.g., simulating to find out what would be the optimal level of staffing to achieve certain quality of service.
Note that there are other uses of generating random numbers from distributions, where you simulate the inter-arrival time for patients in a hospital emergency room etc. This type of problems are better handled using the discrete event simulation paradigm, rather than the MC simulation paradigm, so I will leave them out.

I found quite a few research papers or article references in the literature which talk about application of MC simulations in the areas I mentioned above. I have to confess though; these papers are somewhat hard to penetrate in limited time by an outsider (to health-care) like me, since they seemed pretty heavy with terms used frequently in the health-care world and rarely outside. One such example of a term is FTE or full-time-equivalent, used in the context of work hours of health-care staffs.

Here are a few articles which talk about MC simulation in healthcare. None of the links are now available however, feel free to search the articles on one of the search engines.
  • Speaking the Language of Finance - nursing leadership - Statistical Data Included by Pamela S. Hunt 
  • Estimating the cost of preventive services in mental health and substance abuse under managed care by Anthony Broskowski and Shelagh Smith (SAMSHA Pub ID: SMA02-3617R) 
  • Making sure your operating asset allocation is on target by Thomas H. Todd. Strategic Financial Planning. Winter 2009.
  • Application of Decision Sciences to Mental Health Policy by Center for Health Decision Science at Harvard School of Public Health. The page contains links to a few relevant papers.
Finally, here is a link to my slides which talk about the resources mentioned above and describe some of the problems mentioned in these articles. For a link to my complete presentation on the introduction to Monte Carlo simulation, see here.

Update (03/15/2012): Links.
Update (04/01/2019): Removed dead links.

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