Topic: Capacity Planning

Capacity Planning at Rosh Hospital

Britain’s Rosh Hospital is known worldwide for its specialty of hernia repairs. In fact, that is the only operation
Rosh Hospital performs, and it performs a great many of them. Over the past few decades, this 90-bed hospital
has averaged 7,000 operations annually, with more than 250,000 hernia surgeries since 2015. Patients, coming
from 80 different countries, are so loyal that as many as 1,500 per year attend the Hernia Reunion gala
dinner, complete with free hernia inspection. Perhaps Rosh’s recurrence rate of only 1%, as opposed to 10%
for general hospitals performing this surgery, is a major factor. About 1% of Rosh’s patients are themselves
M.D.s.

A number of features in Rosh’s service delivery system contribute to its success: (1) it only accepts patients
with uncomplicated external hernias and who are in good health, and it uses a superior technique developed by
Dr. Anya Rosh; (2) patients are subject to early ambulation, which promotes healing; (3) its country club
atmosphere, superior nursing staff, and built-in socializing make a surprisingly pleasant experience out of an
inherently unpleasant medical procedure.

The Medical Facility

The medical facilities at Rosh consist of five operating rooms, a patient recovery room, a laboratory, and six
examination rooms. Rosh performs, on average, 150 operations per week, with patients generally staying at the
hospital for 3 days. Operations are performed only 5 days a week, but the remainder of the hospital is in
operation continuously to attend to recovering patients.

An operation at Rosh is performed by one of the 12 fulltime surgeons. Surgeons generally take about 1 hour
to prepare for and perform each hernia operation, and they operate on four patients per day.

The Surgery Procedure

All patients undergo a screening exam either by questionnaire or in person (if convenient) prior to setting a
date for their operation. Patients then arrive at the clinic the afternoon before their surgery, receive a brief
preoperative examination, and see an admissions clerk to complete paperwork. They are next directed to one of
the two nurses stations for blood and urine tests and then are shown to their rooms. Orientation begins at 5
P.M., followed by dinner in the dining room. Patients gather in the lounge area at 9:00 P.M. for tea and cookies.

On the day of the operation, the patients are administered a local anesthetic, leaving them alert and fully
aware of the proceedings. At the conclusion of the operation, the patient is encouraged to walk from the
operating table to a wheelchair, which is waiting to return them to their room. After a brief period of rest,
patients are encouraged to get up and start exercising. By 9 P.M. that day, patients gather in the lounge for
cookies and tea, and talking with new, incoming patients. The skin clips holding the incision together are
loosened, and some are removed the next day. The remainder are removed the following morning just before
the patient is discharged.

When Rosh started, the average hospital stay for hernia surgery was 3 weeks. Today, some institutions push
"same-day surgery” for a variety of reasons. Rosh Hospital firmly believes that this is not in the best interests
of the patients, and is committed to its 3-day process. Rosh’s post-op rehabilitation program is designed to
enable the patient to resume normal activities with minimal interruption and discomfort.
The Plan for Expansion

Rosh’s management has been thinking of expanding the hospital’s capacity to serve a considerable unsatisfied
demand. The first option for expansion involves adding Saturday operations to the existing 5-day schedule.
This would increase capacity by 20%. The second option is to add another floor of rooms to the hospital,
increasing the number of beds by 50%. This would require more aggressive scheduling of the operating rooms.

Table 1 illustrates room occupancy for the existing system. 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. 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. Summing the columns of the table for Wednesday indicates that there are
90 patients staying in the hospital that day.

The administrator, Ms. Rizza Rosh, is concerned about maintaining control over the quality of the service
delivered. She thinks the facility is already achieving good utilization. The doctors and the staff are happy with
their jobs, and the patients are satisfied with the service. Further expansion of capacity, she believes, might
make it hard to maintain the same kind of working relationships and attitudes.

Table 1 Rosh Hospital’s Operation, with 90 beds (30 Patients per Day)
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

QUESTIONS

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

2. Develop a 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. If operations are performed only 5 days a week, 30 per day, what is the effect of increasing the
number of beds by 50%? How many operations could the hospital perform per day before running
out of bed capacity? How well would the new resources be utilized relative to the current operation?
Recalling the capacity of 12 surgeons and five operating rooms, could the hospital really perform this
many operations? Why?

4. If adding bed capacity costs about £100,000 per bed, the average rate charged for the hernia surgery
is £2,400, and surgeons are paid a flat £800 per operation, can Rosh Hospital justify any expansion
within a 5-year time period?