Shouldice

In: Other Topics

Submitted By libranraj
Words 397
Pages 2
Considering all the available alternatives we have, performing surgeries on Saturdays without making any other changes in the facility is the best alternative available due to the following reasons:
• no fresh capital investment is required
• no new construction required
• revenue outweighs extra costs
• quality of the service will be maintained

By drilling down to numbers, there are 89 beds in total which are used for 5 days, therefore, sum of daily capacity = 89*5 = 445 and if we look at the best operating level, it is capacity maximum*7= 623
Current utilization rate is around 445/623 = 71.4%
And we start performing surgeries on Saturdays too, daily capacity = 89*6 = 534
Therefore, the utilization rate will be around 534/623 = 85.7%
As you can notice, there is an increase in the utilization of the current facility by almost (534-445)*100/445 = 20% at no extra costs.
This increase in utilization rate does not come at the cost of some new construction but utilizing the same already available resources thereby, not adding to extra costs.
As there is no fresh capital investment involved, current costs for surgeries can be maintained, hence, there is less risk of decrease in the number of the incoming patients which could have been an issue if the current costs for surgeries were increased while expanding to a new facility or in addition to a new floor.
However, this increase in the utilization rate also comes at a trade off as in order to perform some surgeries on Saturdays, surgeons, assisting surgeons as well as additional hospital personnel have to work an extra day which increases the costs in terms of employee salaries and facility operations but on the whole revenue will outweigh the costs by a good margin.
Whereas the senior doctors oppose this alternative, as senior Dr. Obney is going to retire anyways, this can be a good experience for…...

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