[Colloquium] Colloquium at TTIC: Prof. Mark Braverman, Princeton

[Dawn Ellis]

When:  Thursday, October 3, 2013 at 11am

Where: TTIC: 6045 S. Kenwood Ave.  Room 526

Speaker: Prof. Mark Braverman from Princeton


Title
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Optimal Provision-After-Wait in Healthcare

Abstract
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In this talk we will discuss computational and mechanism design
aspects of optimal scarce resource allocation, where the primary
rationing mechanism is through waiting times.

Specifically, we consider the problem of allocating medical treatments
to a population of patients. Each patient has demand for exactly one
unit of treatment, and can choose to be treated in one of k hospitals.
Different hospitals have different costs, which are fully paid by a
third party ---the “payer”--- and do not accrue to the patients.
Access to over-demanded hospitals is rationed through waiting times:
each hospital H_i will have waiting time w_i. In equilibrium, each
patient will choose his most preferred hospital given his intrinsic
preferences and the waiting times. Assuming the payer has a fixed
budget; it needs to decide how many treatments of each type to procure
to optimize the welfare in equilibrium.

We show that the equilibrium waiting times will emerge endogenously.
We then show that even if the patients’ preferences are known to the
payer, the task of optimizing social welfare in equilibrium subject to
the budget constraint is NP-hard. We also show that, with constant
number of hospitals, if the budget constraint can be relaxed from B to
(1+\epsilon)B for an arbitrarily small constant \epsilon, then the
original optimum under budget B can be approximated very efficiently.

Going beyond equilibrium solutions we investigate the optimization
problem over a much larger class of mechanisms containing the
equilibrium ones as special cases. In the setting with two hospitals,
we show that under a natural assumption on the patients’ preference
profiles, optimal welfare is in fact attained by the randomized
assignment mechanism, which allocates patients to hospitals at random
subject to the budget constraint, but avoids waiting times.

Finally, we discuss potential policy implications of our results, as
well as follow-up directions and open problems.

-- 
*Dawn Ellis*
Administrative Coordinator,
Bookkeeper
773-834-1757
dellis at ttic.edu

TTIC
6045 S. Kenwood Ave.
Chicago, IL. 60637
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