The neonatal system at Mount Sinai Hospital (MSH) has experienced an increased demand for services that has forced the Neonatal Intensive Care Unit (NICU) to consistently operate at capacity. In response, MSH is investigating strategies to alleviate the stress on the NICU. MSH has requested the development of a simulation to help them understand the neonatal system and the implications of the strategies that are proposed.Research is conducted through the use of systems dynamics simulation and scenario analysis, which aims to identify key bottlenecks in the system and the effects of system changes on these areas. A key finding of the research is that increasing beds solely in the NICU does not improve efficiency in the system as a whole; however, increasing beds in the NICU and Level 2, the step down unit from the NICU does produce greater efficiency.