Hospital Performance

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The table below gives some operational statistics for two hospitals located in the same community. Use the table to answer the following questions.

  1. Calculate the following measures for each hospital (wherever appropriate, calculate the measure for each pay type). Discuss the meaning and significance of each measure and point out the differences between the two hospitals.
    1. Hospital capacity
    2. ALOS
    3. Occupancy rate
  2. Operationally which hospital is performing better? Why?
  3. Do you think the nonprofit hospital is meeting its community benefit obligations in exchange for its tax-exempt status? Explain.
  4. Do you think the hospitals have a problem with excess capacity? If so, what would you recommend? In your answer to this question, please consider how hospital governance may impact the ability of an administrator to make changes.

Health care is a complex system that requires in-depth thinking, expertise, and ethical consideration so to encapsulate and further associate the concepts you are learning, in most modules, you will have the opportunity to reflect in-depth on relevant interconnected concepts. The expectations of the reflection paper include (1) Answer completely all the prompts or questions; (2) reflection should be between  800 and 1,000 words; (3) use APA-style;  (4) turn in via Canvas by end of the Day 7 of the module (11:59 PM).

This reflection is a bit different since you need to do some calculations and answer specific questions. You can answer the questions using an Excel or Word document.

The table below gives some operational statistics for two hospitals located in the same community. Use the table to answer the following questions.

  1. Calculate the following measures for each hospital (wherever appropriate, calculate the measure for each pay type). Discuss the meaning and significance of each measure and point out the differences between the two hospitals.
    1. Hospital capacity
    2. ALOS
    3. Occupancy rate
  2. Operationally, which hospital is performing better? Why?
  3. Do you think the nonprofit hospital is meeting its community benefit obligations in exchange for its tax-exempt status? Explain.
  4. Do you think the hospitals have a problem with excess capacity? If so, what would you recommend? In your answer to this question, please consider how hospital governance may impact the ability of an administrator to make changes.

Table

Calendar Year 2016 Nonprofit Community Hospital (A) Proprietary Community Hospital (B)
Number of Beds in Operation 320 240
Total Discharges 12,051 9,230
     Medicare 5,130 3,876
     Medicaid 3,565 2,118
     Private Insurance 3,356 3,236
Total hospital days 72,421 51,684
     Medicare 36,935 26,359
     Medicaid 23,175 12,921
     Private Insurance 12,311 12,404
Total inpatient revenues $ 45,755,000 $ 35,800,000
Dollar value of community benefits $ 5,000,000 $ 3,500,000

 

This activity covers the following module objectives: MO 5, MO 8.

Hospital performance

  1. Hospital Capacity:

Hospital A: Number of Beds in Operation = 320

Hospital B: Number of Beds in Operation = 240

  1. Average Length of Stay (ALOS):

ALOS is the average number of days a patient stays in the hospital. To calculate ALOS, you divide the total hospital days by the total discharges.

Hospital A: ALOS = Total hospital days / Total Discharges ALOS = 72,421 / 12,051 ≈ 6 days

Hospital B: ALOS = 51,684 / 9,230 ≈ 5.6 days

  1. Occupancy Rate:

Occupancy rate is the percentage of beds that are occupied. To calculate occupancy rate, you divide the total hospital days by (365 days * number of beds in operation) and multiply by 100.

Hospital A: Occupancy Rate = (72,421 / (365 * 320)) * 100 ≈ 62.5%

Hospital B: Occupancy Rate = (51,684 / (365 * 240)) * 100 ≈ 56.3%

Now, let’s discuss the meaning and significance of each measure and point out the differences between the two hospitals:

  • Hospital Capacity: Hospital A has a larger capacity with 320 beds compared to Hospital B’s 240 beds. This indicates that Hospital A has the potential to serve a larger number of patients.
  • Average Length of Stay (ALOS): Hospital A has a slightly higher ALOS (6 days) compared to Hospital B (5.6 days). A higher ALOS may indicate that patients in Hospital A tend to stay longer, which could be due to the types of services provided or patient demographics.
  • Occupancy Rate: Hospital A has a higher occupancy rate (62.5%) compared to Hospital B (56.3%). A higher occupancy rate suggests that Hospital A is utilizing its beds more efficiently.

Now, let’s assess which hospital is performing better operationally:

  • Hospital A has a larger capacity and a higher occupancy rate, indicating better bed utilization.
  • Hospital B has a slightly lower ALOS, which could be seen as a positive sign as it means patients are spending slightly less time in the hospital.

Overall, it’s challenging to determine definitively which hospital is performing better without more context. Hospital A appears to have better bed utilization, but Hospital B may be providing more efficient care with a slightly lower ALOS.

Regarding the community benefit obligations of the nonprofit hospital and whether it meets its tax-exempt status:

  • The nonprofit hospital (Hospital A) has provided a higher dollar value of community benefits ($5,000,000) compared to the proprietary hospital (Hospital B) with $3,500,000. This suggests that Hospital A is making a larger effort to benefit the community it serves, which aligns with the expectations of tax-exempt status.

Now, let’s consider the question of excess capacity and recommendations:

  • Both hospitals have some level of excess capacity. Hospital A has 320 beds but an average daily census of 198. Hospital B has 240 beds but an average daily census of 141. This indicates that both hospitals have the potential to serve more patients or could optimize their resources better.

Recommendations:

  1. Optimize Bed Utilization: Both hospitals should focus on improving bed utilization to reduce excess capacity. This can be achieved by efficient scheduling, managing patient flow, and possibly expanding services to attract more patients.
  2. Community Outreach: Hospital B could consider increasing its community benefit initiatives to align more closely with the expectations of its tax-exempt status, especially if it aims to compete with Hospital A.
  3. Governance and Leadership: Hospital governance plays a crucial role in implementing changes. Hospital administrators should work closely with the board of directors to make necessary operational improvements, including optimizing capacity and community benefit initiatives. Governance structures can impact the ability to make changes, as decisions often involve various stakeholders.

In conclusion, while Hospital A has a larger capacity and better bed utilization, Hospital B has a slightly lower ALOS and both hospitals have some excess capacity. Hospital A is meeting its community benefit obligations more significantly. Recommendations for both hospitals include optimizing bed utilization, community outreach, and considering governance structures in implementing changes. The choice of which hospital is performing better may depend on the specific goals and priorities of each hospital and the community it serves.

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