Nicos Savva

“Nursevendor Problem”: Personnel Staffing in the Presence of Endogenous Absenteeism

The problem of determining nurse staffing levels in a hospital environment is a complex task because of variable patient census levels and uncertain service capacity caused by nurse absenteeism. In this paper, we combine an empirical investigation of the factors affecting nurse absenteeism rates with an analytical treatment of nurse staffing decisions using a novel variant of the newsvendor model. Using data from the emergency department of a large urban hospital, we find that absenteeism rates are consistent with nurses exhibiting an aversion to higher levels of anticipated workload. Using our empirical findings, we analyze a single-period nurse staffing problem considering both the case of constant absenteeism rate (exogenous absenteeism) as well as an absenteeism rate that is a function of the number of nurses scheduled (endogenous absenteeism). We provide characterizations of the optimal staffing levels in both situations and show that the failure to incorporate absenteeism as an endogenous effect results in understaffing. This paper was accepted by Yossi Aviv, operations management.

Physician Workload and Hospital Reimbursement: Overworked Physicians Generate Less Revenue per Patient

We study the impact of physician workload on hospital reimbursement utilizing a detailed data set from the trauma department of a major urban hospital. We find that the proportion of patients assigned a “high-severity” status for reimbursement purposes, which maps, on average, to a 47.8% higher payment for the hospital, is substantially reduced as the workload of the discharging physician increases. This effect persists after we control for a number of systematic differences in patient characteristics, condition, and time of discharge. Furthermore, we show that it is unlikely to be caused by selection bias or endogeneity in either discharge timing or allocation of discharges to physicians. We attribute this phenomenon to a workload-induced reduction in diligence of paperwork execution. We estimate the associated monetary loss to be approximately 1.1% (95% confidence interval, 0.4%--1.9%) of the departments annual revenue.

Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

When a product of uncertain quality is first introduced, consumers may choose to strategically delay their purchasing decisions in anticipation of the product reviews of their peers. This paper investigates how the presence of social learning affects the strategic interaction between a dynamic-pricing monopolist and a forward-looking consumer population, within a simple two-period model. Our analysis yields three main insights. First, we find that the presence of social learning has significant structural implications for optimal pricing policies: In the absence of social learning, decreasing price plans are always preferred by the firm; by contrast, in the presence of social learning we find that (i) if the firm commits to a price path ex ante (preannounced pricing), an increasing price plan is typically announced, whereas (ii) if the firm adjusts price dynamically (responsive pricing), prices are initially low and may either rise or decline over time. Second, we establish that under both preannounced an...

Gatekeepers at Work: An Empirical Analysis of a Maternity Unit

We use a detailed operational and clinical data set from a maternity hospital to investigate how workload affects decisions in gatekeeper-provider systems, where the servers act as gatekeepers to specialists but may also attempt to serve customers themselves, albeit with a probability of success that is decreasing in the complexity of the customers’ needs. We study the effect of workload during a service episode on gatekeepers’ service configuration decisions and the rate at which gatekeepers refer customers to a specialist. We find that gatekeeper-providers (midwives in our context) make substantial use of two levers to manage their workload (measured as patients per midwife): they ration resource-intensive discretionary services (epidural analgesia) for customers with noncomplex service needs (mothers with spontaneous onset of labor) and, at the same time, increase the rate of specialist referral (physician-led delivery) for customers with complex needs (mothers with pharmacologically induced labor). Th...

Signaling New Product Reliability with After-Sales Service Contracts

Prior studies on performance-based contracting PBC for after-sales services have highlighted its advantages over traditional resource-based contracting RBC, when products are established and their reliability is known to all parties. We develop a game theoretic model to investigate how these insights are affected when the vendor is privately informed about the reliability of a newly developed product. A novel feature of our model is the interaction between reliability signaling private information and the vendors discretionary investment in spares inventory private action, which arises naturally in the setting we consider. We find that this interaction leads to contrasting equilibrium outcomes under the two contracts: RBC induces the vendor to focus on inventory savings, leading to underinvestment in spares, whereas PBC induces the vendor to focus on reliability signaling, achieved through overinvestment in inventory. As a result, neither contract is efficient. We investigate two means to mitigate this inefficiency, but either approach has caveats: a making inventory verifiable removes the trade-off between reliability signaling and inventory investment, but results in diverging contract preferences between the vendor and the buyer; b pooling inventories across multiple buyers saves inventory costs but it also hinders reliability signaling, potentially exacerbating inefficiency. This paper was accepted by Yossi Aviv, operations management.

The Role of Equity, Royalty, and Fixed Fees in Technology Licensing to University Spin-Offs

We develop a model based on asymmetric information adverse selection that provides a rational explanation for the persistent use of royalties alongside equity in university technology transfer. The model shows how royalties, through their value-destroying distortions, can act as a screening tool that allows a less-informed principal, such as the universitys Technology Transfer Office TTO, to elicit private information from the more informed spin-off. We also show that equity-royalty contracts outperform fixed-fee-royalty contracts because they cause fewer value-destroying distortions. Furthermore, we show that our main result is robust to problems of moral hazard. Beside the coexistence result, the model also offers explanations for the empirical findings that equity generates higher returns than royalty and that TTOs willing to take equity in lieu of fixed fees are more successful in creating spin-offs. This paper was accepted by David Hsu, entrepreneurship and innovation.

Is IT enough? Evidence from a natural experiment in India's agriculture markets

Access to information and communication technologies (ICTs) such as mobile phone networks is widely known to improve market efficiency. In this paper, we examine whether access to timely and accurate information provided through ICT applications has any additional impact. Using a detailed data set from Reuters Market Light (RML), a text message service in India that provides daily price information to market participants, we find that this information reduces the geographic price dispersion of crops in rural communities by an average of 12%, over and above access to mobile phone technology and other means of communication. To identify the effect of information on price dispersion, we exploit a natural experiment where bulk text messages were banned unexpectedly across India for 12 days in 2010. We find that besides reducing geographic price dispersion, RML also increases the rate at which prices converge across India over time. We discuss the implications of this for development organizations and information providers. This paper was accepted by Lorin Hitt, information systems .

Executive Summary: Codeines and Coding

Adam Powell, Sergei Savin and Nicos Savva, ‘Physician workload and hospital reimbursement: Overworked servers generate lower income’, Working Paper, August, 2011.