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Mt. Sinai Hospital: Quantitative Analysis for Management

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Mt. Sinai Hospital in New Orleans is a large, private 600 bed facility, complete with labratories, operating rooms, and x-ray equipment. Mt. Sinai's administration has decided to make a 90-bed addition on a portion of adjacent land currently used for staff parking. The administrators feel that the labs, operating rooms, and x-ray department are not being fully utilized at present and do not need to be expanded to handle additional patients. The addition of 90 beds, however, involves deciding how many beds should be allocated to the medical staff for medical patients and how many to the surgical staff for surgical patients.

The hospital's accounting and medical records departments have provided the following pertinent information. The average hospital stay for a medical patient is 8 days, and the average medical patient generates $2,280 in revenues. The average surgical patient is in the hospital 5 days and receives a $1,515 bill. The laboratory is capable of handling 15,000 tests per year more than it was handling. The average medical patient requires 3.1 lab tests and the average surgical patient takes 2.6 lab tests. Furthermore, the average medical patient uses on x-ray, whereas the average surgical patient requires two. If the hospital was expanded by 90 beds, the x-ray department could handle up to 70,000 x-ray without significant additional cost. Finally, the administration estimates that up to 2,800 additional operations could be performed in existing operating room facilities. Medical patients, of course, do not require surgery, whereas each surgical patient generally has one surgery performed.

Formulate this problem so as to determine how many medical beds and how many surgical beds should be added to maximize revenues. Assume, that the hospital is open 365 days a year. Then solve the problem.

a. What is the maximum revenue per year, how many medical patients/year are there, and how many surgical patients/year are there? How many medical beds and how many surgical beds of the 90-bed addition should be added?

b. Are there any empty beds with this optimal solution? If so, how many beds are there? Discuss the effect of acquiring more beds if needed.

c. Are the laboratories being used to their capacity? Is it possible to perform more lab tests/year? If so, how many more? Discuss the effect of acquiring more lab space if needed.

d. Is the xray facility being used to its maximum? Is it possible to do more x-rays/year? If so, how many more? Discuss the effect of acquiring more x-ray facilities if needed.

e. Is the operating room being used to capacity? Is it possible to do more operations/year? If so how many more? Discuss the effect of acquiring more operating room facilities if needed.

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The solution examines quantitative analysis for management at Mt. Sinai Hospital.

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