Linear programming models for cost reimbursement.

摘要: Tamura, Lauer, and Sanborn (1985) reported a multiple regression approach to the problem of determining cost reimbursement (rate-setting) formula for facilities providing long-term care (nursing homes). In this article we propose an alternative problem, using absolute-error criterion instead least-squares used in regression, with variety side constraints incorporated derivation formula. The mathematical tool implementation is linear programming (LP). begins discussion desirable characteristics rate-setting development these properties can be easily achieved, terms modeling as well computation, LP. Specifically, LP provides efficient computational algorithm minimize absolute error deviation, thus protecting rates from effects unusual observations data base. also offers flexibility impose policy controls. These features are not readily available if used. Examples based on actual illustrate models rate setting.