Competitive Location Model in Healthcare: A Case Study on Tehran’s Health Centers

Background and Objectives: The location of facilities is of great importance in healthcare and is of interest to researchers. In this regard, a large proportion of classic location-allocation models concentrate on solving problems in an exclusive environment (non-competitive), but this assumption is rarely true in reality. Methods: At first, a basic Non-Competitive Location Model (NCLM) is presented. Then, a Competitive Location Model (CLM) is developed based on the initial model. This study proposes a multi-objective integer programming model based on Nash bargaining game. The first objective function maximizes the two-person Nash product, which in turn maximizes the total number of patients covered by the newly established healthcare centers. The second objective function minimizes the sum of distances between population centers and the newly established healthcare centers. Findings: The results obtained from applying the CLM on Tehran’s Health Centers revealed the capabilities of this model in simulating the competitive situations. For instance, by comparing the results obtained from both models (non-competitive and competitive) it became clear that the total covered population was considerably increased in the CLM. Conclusions: The proposed location model can be used as a basis for decision making by managers. Because of any wrong decision, in addition to raising the costs of the health system, can also lead to irreparable damage to human and social health.