Dynamic operational planning tool for a patient transportation company

Health care costs in Switzerland raised between 2010 to 2015 about 19% to 77.8 billion Swiss francs. During the same time period, costs for patient transportation increased dramatically by 44%. Since patient transportations are executed often by a third party provider, a case study on a real transportation company has been conducted to analyze potentials for process improvements. As the main problem the assignment of transportation orders to vehicles by a human dispatcher has been detected as the degree of capacity utilization in driven kilometers is rather weak. In literature, this problem is known as the vehicle routing problem with pick-up and delivery with time windows (VRPPDTW). Only 40% of the total driven distance is driven with a patient, the remaining 60% are considered as idle drives. This matter of fact leads to high costs. In order to enhance this process and solve the VRPPDTW, optimization methods have been evaluated. Based on this evaluation a metaheuristic approach – more precisely a Tabu Search algorithm – has been selected and implemented. Taking into account the underlying problem of the VRPPDTW, a model of a solution has been designed by implementing Tabu Search. Test cases have shown that Tabu Search is able to return good feasible solutions within a short amount of computational time. By implementing an optimization method, the transportation company is able to improve its degree of capacity utilization up to a level of 63.5%. Hence, an optimization method is able to outperform a human dispatcher significantly. Assuming the transportation company is able to raise its capacity utilization on such a level (of 63.5%), the corresponding savings of idle drives amount to 683 thousand kilometers per year. Multiplying this number of saved kilometers by the weighted vehicle costs per kilometer of 0.65 Swiss francs, this results in savings of 293 thousand Swiss francs. This amount of potential savings corresponds to 10% of the current total operating costs of the transportation company. The savings in transportation costs would allow the transportation company to lower its prices and hence pressure the market price and contributing to lower health care costs.