Matching Capacity to Demand

Posted by BestPractices on August 23 2011

Managing demand and capacity together can be in done in two ways.  You can smooth patient demand or match service capacity to meet it.  Both involve tracking data and responding accordingly.  Because they confront the same kinds of peaks and valleys, service businesses have developed strategies to help match capacity to demand; strategies equally useful in healthcare settings.  Here is a breakdown of how you can manage demand and manage supply / capacity strategically:

Managing Demand:


Partitioning/segmenting demand

Developing complementary services

Offering price incentives

Developing reservation systems

Promoting off peak demand


Managing Supply / Capacity:

Customer participation

Cross training

Shared capacity

Innovative scheduling and shift work

Flexible capactiy

Using part time employees


Keep in mind, healthcare is a service, not a physical item that can be stored on a shelf and retrieved whenever it is needed.  If an hour goes by when a doctor or nurse can’t deliver care, that service time and opportunity are gone forever.  When those five patients suddenly arrived in the ED and the queues began to form, the clinical service time available before they arrived can’t be recovered or used.   If you keep track of the number of patients arriving in your hospital over a certain amount of time and plot that number and that time on a graph, you will see fluctuation.  This is where we’ve created four key questions for demand capacity management.  The aim in demand capacity management is to establish a measure of patient demand by hour and to design a system to handle it.

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