Optimal Location of Remote Dental Units

Abstract

Dental care, though critical, may not be accessible for many rural populations. Remote dental units (RDUs) can address the gap in access by providing basic services to rural areas, since recent digital health advancements enable close data integration between field RDUs and regional medical center clinical experts. Yet, the economic viability of this remote/hybrid care delivery effort has not been clearly established. We explore the economics of a major dental hospital operating RDUs in a distant rural area. Specifically, we characterize the optimal location of an RDU and examine the impact of operating this RDU on the hospital's profit. We prove that the ideal scenario, from a patient-coverage perspective, is to put the RDU far enough away from the hospital that patients accessing the RDU are distinct from patients accessing the hospital. This positioning avoids coverage overlap (market cannibalization). However, we show that such a placement may not always be optimal for the hospital’s profit, and we derive conditions under which the optimal patient coverage for the hospital and the RDU overlaps. Our results remain consistent for a hospital operating an RDU at different locations. The RDU will not be deployed in another location if the previous two locations have some coverage overlap. Our characterization of the profit-maximizing location provides hospitals with a practical guideline by quantifying the key trade-off between service expansion and the costs incurred by sending the provider team to remote, underserved locations. Our findings lead to important operational implications for regional dental care service by RDUs.

Keywords: OR in health services, Remote dental units, Patient access, Facility location, Health economics