Efficiency Versus Effectiveness in Hospitals: A Dynamic Simulation Approach

Hospitals provide highly sophisticated services, but they are largely steered by means of simplistic management models, which do not match the complexities faced by these organizations. The design of management models in hospitals and public organizations at large shows a bend toward reductionism. The reductionism of these models is rooted in their short-termism, and in the myopia of their designers. The purpose of our contribution is to draft a path by which steering approaches can be developed, which are more effective in coping with organizational complexity than the short-termist, reductionist management models often in use. Using a generic model, we demonstrate that conventional approaches to steering entail unintended side effects leading to counterproductive system behaviors and to results inferior to those coming from no steering at all. We suggest how more sophisticated steering models can be designed to induce desirable modes of system behavior.