Question

Shouldice Hospital in Canada is widely known for one thing—hernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past two decades this small 90-bed hospital has averaged 7,000 operations annually. Last year, it had a record year and performed nearly 7,500 operations.

A hernia repair operation at Shouldice Hospital is performed by one of the 12 full-time surgeons assisted by one of seven part-time assistant surgeons. The first operations begin at 7:30 AM each day, Monday through Friday. Surgeons generally take about one hour to prepare for and perform each hernia operation, and they operate on an average of at most four patients per day. This four patient per day limit on the average number of operations performed per surgeon has been found to be the best operating level for the hospital as it take into account time the surgeons need for patient exams and consultations, updating medical charts, writing reports, traveling to professional conferences, vacations, and other times when they are performing other duties or are not available to perform surgeries. A given surgeon may perform more than four surgeries on a given day, but the average cannot exceed four without having adverse effects on overall hospital operations. The surgeons’ day ends at 4 p.m. Although hernia repair operations are performed only five days a week, the remainder of the hospital is in operation continuously to attend to recovering patients.

The below table shows the number of operations with 90 Beds (30 patients per day).Each row in the table follows the patients who checked in on a given day. The columns indicate the number of patients in the hospital on a given day. Patients check-in to the hospital the day before their operation is scheduled and stay for three days.

	BEDS REQUIRED
CHECK-IN DAY	MONDAY	TUESDAY	WEDNESDAY	THURSDAY	FRIDAY	SATURDAY	SUNDAY
Monday	30	30	30
Tuesday		30	30	30
Wednesday			30	30	30
Thursday				30	30	30
Friday
Saturday
Sunday	30	30					30
Total	60	90	90	90	60	30	30

For example, the first row of the table shows that 30 people checked in on Monday and were in the hospital for Monday, Tuesday, and Wednesday. By summing the columns of the table for Wednesday, we see that there are 90 patients staying in the hospital that day.

The medical facilities at Shouldice consist of five operating rooms, a patient recovery room, a laboratory, and six examination rooms. An operation at Shouldice Hospital is performed by one of the 12 full-time surgeons assisted by one of seven part-time assistant surgeons. Surgeons generally take about one hour to prepare for and perform each hernia operation.

Now look at the effect of increasing the number of beds by 50 percent. Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about $100,000 per bed. In addition, the rate charged for the hernia surgery varies between about $900 and $2,000 (U.S. dollars), with an average rate of $1,300 per operation. The surgeons are paid a flat $600 per operation.

How many weeks would it take the hospital to payback its investments? (Round your answer to 1 decimal place.)

Answer 1

Dear,

With in a what time will hospital recover it invested amount for increaseing its Bed capacity or we can say number of patient attend.

In short we can say question is asking for Break even point of hospital investment.

Data what is given is as below.

At present hospital held ninety beds and a single patient stay for 3 days in hospital from pre operation to post operation.

So from this we can say they can regularly 30 operation in a days.

Now if capacity of bed is increase by 50% so number of bed with hospital will be as below.

= 90+(90*50/100)

=90+45 = 135 beds

Therefore number of patient available for operation can be 135/3 ( as a patient stay for 3 days) i.e. 45 patients per days so for a week it will be 45*5 i.e. 225 (if 100% capacity is used.)

Capacity of hospital for opertation

Available operation room is 5

No of hour for a operation is 1 hour

per day hour of doctors for operation 7.30 AM to 4.0 PM so maximum 9 hour

In one operation room hospital can conduct 9 operation per day.

Possibilty of operation per day is No. of operation room * capaicty of per operation room

i.e. 5*9

therefore maximum 45 operation can be conduct in single day and in week it will be 45*5 i.e. 225 operation per week.

Now let us see capacity of surgoen here it is given a surgoen can conduct 4 operation per day for best as per hospital norm so there are 12 full time surgoen and 7 part time surgeon

here we consider capacity or norm of hospital is lie on only full time surgeon

therefore hospital can operate maximum 12*4 i.e. 48 patents and per week will be 48*5 i.e. 240

but operation room capacity is 225 only.

so maximum operation in hospital can be take palce 225 per week.

Total investment of adding bed = No. of bed add * cost per bed

= 45*100000

= $ 4500000

Saving of  per operation = Average cost of operation - Fees paid to Surgeon

= 1300 - 600

$ 700

How many operation hospital need to conduct to earn invested amount of adding bed is as below

= Total Investment / saving of per operation

= 4500000/700

= 6428.57 operation

how many week will take time

= total operation / no of operation per week

=6428.57/225

= 28.6 weeks

so we can say by using 100% capacity of hospital, hospital can reach on BEP in 28.6 weeks