Capacity planning for long-term care networks

We study the problem of capacity planning for long-term care services, which is important not only for the elderly and disabled who cannot adequately care for themselves but also for long-term care providers and health policymakers. Patients with long-term care needs usually have to transfer between different settings such as nursing homes and home- and community-based services. We model patient flows among these settings using an open migration network and formulate the planning of the capacity needed to provide long-term care with a newsvendor-type model. We explore the structural properties of the model and identify the most influential factors, such as the penalty cost for capacity shortage and transition rates between different care settings, in making capacity decisions. With the model developed, capacity decisions for long-term care service networks can be made more systematically with full consideration of different patient flow patterns and budget constraints. The research will be especially useful to long-term care policymakers in a state or nationwide given the worsening shortage of care providers and the escalating long-term care needs resulting from population aging.