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Hospital Efficiency Case Study

From: Case: Shouldice Hospital - A Cut Above. pages 87-88. Section 2. Manufacturing, Service, and Health Care Processes.

1. How well is the hospital currently utilizing its beds?

2. Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day.) How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients?

3. Now look at the effect of increasing the number of beds by 50 percent. How many operations could the hospital perform per day before running out of bed capacity? (Assume operations are performed five days per week, with the same number performed on each day.) How well would the new resources be utilized relative to the current operation? Could the hospital really perform this many operations? Why? (Hint: Look at the capacity of the 12 surgeons and the five operating rooms.).

4. Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about $100,000.00 per bed .In addition, the rate charged for the hernia surgery varies between about $900 and $2,000 (US dollars), with an average rate of $1,300 per operation. The surgeons are paid a flat $600 per operation. Due to the uncertainties in government health care legislation. Shouldice Hospital would like to justify an expansion from 90 beds to 135 beds within a five-year time period.

Solution Preview

1. It appears that this organization is utilizing its beds very efficiently, largely due to the fact that it has set up a very efficient schedule by which the hernia operations will take place. In addition, this organization only accepts patients who are in need of the most basic form of hernia operation, which ensures that these operations will not be highly time-consuming, and thereby ensure that the beds can be utilized very quickly after a patient's hernia operation is complete. This is a very important aspect of the efficient utilization of the beds by this organization, due to the fact that turnaround time is a strong determining factor in the effective utilization of limited bed resources. Without this quick turnaround time, it would be very difficult for this organization to be able to achieve the high rate of successful hernia operations that it does. This organization also utilizes a highly efficient and effective surgical technique in performing its hernia operations, which serves to further decrease the time that it takes to properly treat a patient, which serves to make a bed of available for the next patient much more expeditiously. In addition to ...