Short-term case mix management with linear programming.

One short-term economic incentive created by a prospective payment system based on diagnosis-related groups (DRGs) is for hospital managers to optimally and efficiently use the hospital's current mix of services to maximize net contribution. DRGs provide a managerial definition of the hospital's product by determining the number of patients discharged within each of the 467 groupings. Thus, the DRG case mix can be thought of as the hospital's product mix. As in major industry, linear programming models may prove useful in determining the hospital's financially optimal case mix. This article provides a framework for applying the linear programming concept to case mix planning in the hospital setting. It also presents an illustration and interpretation of a linear programming model that provides information about the short-term optimal case mix.