Using the Coxian Continuous‐Time Hidden Markov Model to Analyze Lombardy Region Wards for Older Individuals

Healthcare systems across Europe have come under increased pressure and scrutiny in recent years, with governments requesting that hospitals deliver the highest standard of care to their citizens while managing and achieving tight performance measures and budgets. This chapter investigates the healthcare system for older people in Italy's Lombardy region to model, understand the flow of patients through the system and uncover any potential issues about their care. It introduces the Coxian phase-type distribution (CPT), the continuous-time hidden Markov (CTHMM) models and the Coxian continuous-time hidden Markov models. Combining the CPT with the CTHMM to incorporate the dynamic nature of the underlying latent factor of the system highlights the hidden factors that affect the system. With the reforms of the Italian healthcare system in the 1990s, the Lombardy regional government used this power to set up a quasimarket within its healthcare sector.