East Mercy Medical Center Analysis free essay sample

The East Mercy Medical Center recently hired a new assistant administrator, given the name Dorothy Jacobs. One of her first tasks is to evaluate ways to improve the costs of their hospital management related to the patient capacity in three main hospital wards: Obstetrics, Surgery and Pediatrics. The hospital board is considering expanding their offerings of the same wards, and has allocated a total of $400,000 as budget for this project. The administrator must determine how many additional beds can best satisfy the supply and demand for all the units, considering the budget constraints. Additionally the hospital must follow state guidelines by ensuring not to exceed their capacity more than 5% of the time. Capacity and Cost Analysis Using statistics, the new administrator began analyzing current year’s patient census in each of these wards. The details of Dorothy’s staff findings are depicted on Table I, below. We consider a level of significance of 0. We will write a custom essay sample on East Mercy Medical Center Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 05, given the state regulations. Table I East Mercy Medical Center 2014 Census Data WARD COST PER ADDITIONAL BED SUPPORTING EQUIPMENT (MAX 400,000) CURRENT CAPACITY AVERAGE BEDS USED PER DAY STANDARD DEVIATION Obstetrics 20,000 30 24 (X1) 6. 1 Surgery 26,000 20 13 (X2) 4. 3 Pediatrics 15,500 24 19 (X3) 4. 7 Let B1, B2 and B3 to identify the number of beds to be added. Accordingly, let X1, X2 and X3 be the current demand for beds. Each of these variables is match with the cost constrain; thus we can obtain the following equation: 20,000*B1 + 26,000*B2 + 15,500*B3 ? $400,000 Given the level of significance ? =0. 05, t=0. 95, with a confidence value z=1. 65; thus we can obtain the probability equation per each ward. We begin with Obstetrics: P (X1 ? 30 + B1) ? 0. 95 24 + 1. 65*6. 1 ? 30 + K1 K1? 4. 065 We recommend purchasing at least 4. 3 beds; since we cannot have a 0. 065 bed, we conclude 5 beds are required at a cost of 22,000*5=110,000. A graph of the probability follows, on Graph I. Graph I Student T- Distribution Graphic at a=0. 05, t=09. 95 for the Obstetrics Ward We continue on to analyze the Surgery ward: P (X2 ? 20 + B2) ? 0. 95 13 + 1. 65*4. 3 ? 20 + K2 K2 ? 0. 095 We recommend purchasing at least 0. 95 beds; since we cannot have a 0. 95 bed, we conclude 1 bed is required at a cost of 26,000*1=26,000. A graph of the probability follows, on Graph II. Graph II Student T- Distribution Graphic at a=0. 05, t=09. 95 for the Surgery Ward We finish by analyzing the Pediatrics ward: P (X3 ? 30 + B3) ? 0. 95 19 + 1. 65*4. 7 ? 24 + K3 K3? 2. 755 We recommend purchasing at least 2. 75 beds; since we cannot have a 0. 75 bed, we conclude 3 beds are necessary, at a cost of 15,500*3=46,500. A graph of the probability follows, on Graph III. Graph III Student T- Distribution Graphic at a=0. 05, t=09. 95 for the Pediatrics Ward Given the calculations above, we conclude that a minimum of 9 beds should be added to the hospital capacity distributed as follows; 5 new beds in Obstetrics, 1 new bed in Surgery and 3 new beds in Pediatrics. The total cost for all 9 beds is found by adding up the costs per bed and supplementary accessories per ward, with the equation below: ($22,000*5) + ($26,000*1) + (15,500*3) = $110,000 + $26,000 + $46,500 = $182,500 The total budget for this expansion is less than the allocated $400,000. Remaining funds can be used for additional improvements or future enhancements. References Johnston, N. (n. d. ) Statdistributions. com. Retrieved from http://www. statdistributions. com McClave, J. T. (2011). Statistics for Business and Economics, 11th ed. Pearson Education, Boston, MA. ISBN 978-0-321-64011-6 (student edition) University of Phoenix (2014). East Mercy Medical Center Case. QNT561 Class Home. Provided by Professor Victor Mojica