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Hospital resource allocation.

Good resource allocation is essential to effective hospital cost management. Yet current allocation methods are weak, and the damage done by bad allocations cannot be undone with utilization fine-tuning. The three traditional methods are resource-allocation-by-momentum (RAM); resource-allocation-by-physician (RAP); and resource-allocation-to-survive (RAS). As hospitals change, a new allocation method is needed: resource-allocation-in-response-to-need (RARN). To determine appropriate allocations, RARN analyzes each activity based upon community need, hospital response, and economics. RARN balances cost management emphasis of doing things right (utilization) with doing the right things (allocation).