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System Dynamics in Action: The Worse-before-better Scenario in the City Hospital – Effects of Budget Distribution to the Training & Education Department on Short-term and Long-term Profits

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abstract A major public city hospital is affected by the ongoing transformation in the Swiss health care system due to cost reduction pressure, mergers acquisitions and the mandatory introduction of Diagnosis Related Groups (DRG) by the year 2012. Facing scarce financial and personal recourses, a System Dynamics research project investigates how changes in budget allocation to the training and education department can affect the net profits of the hospital. The model simulation indicates that neither a massive cut, nor a massive increase of budget lead to the best profits in the long-term. Rather a carefully implemented adjust­ment of the budget at a small scale of plus 10% is suggested to realize an increase of the long-term profits. The results of the long-run simulation are counterintuitive and are explained by means of systems approach archetypes like the worse-before-better scenario, information delays, level effects and limits to growth.
   
type conference paper (English)
   
name of conference ISSS2011 (Hull, UK)
date of conference 01-09-2011
title of proceedings Proceedings of the 55th Annual Meeting of the ISSS
review external review
   
citation Buergi, M., & Jung, R. (2011). System Dynamics in Action: The Worse-before-better Scenario in the City Hospital – Effects of Budget Distribution to the Training & Education Department on Short-term and Long-term Profits. In Wilby, J. (Eds.), Proceedings of the 55th Annual Meeting of the ISSS.