Case—AdWords to AdWards: Online Optimization for Hospital Patient Placement

This case illustrates online optimization algorithms for sequential decision making. Students are asked to translate an unfamiliar healthcare setting into a well-known online optimization problem, the Google AdWords problem. The case is based on an actual process improvement project aimed at maximizing the use of a hospital’s capacity. The main character, Dr. Kelly, heads an observation unit and had tried a predictive model for patient assignments to her unit versus the hospital wards, which, however, can sometimes lead to inefficient bed capacity management. She is looking to improve patient allocation decisions made in real time. The complexity of the healthcare environment makes the mapping challenging, requires discussions with experts with domain knowledge and various stakeholders in the process, and raises ethical questions.