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Body Scans and Bottlenecks Optimizing Hospital CT Process Flows Case Solution

Solution Id Length Case Author Case Publisher
2769 2064 Words (8 Pages) Sunil Chopra, Scott Flamm, Sachin Waikar Kellogg School of Management : 5-211-256
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The radiologist of the facility in the Midwest described here scanned the bodies of adult and pediatric patients using CT scanners that were more than a decade outdated. Although the recent $6 million expenditure in three additional CT scanners has the potential to decrease imaging times by nearly half, this cost must be compensated for by better profitability and more efficient operations. Dr. Foster, the director of radiology, has programme management problems such as increasing return on investment and making more efficient use of available personnel. Given his wide latitude, he is held to high standards in terms of simplifying operations and decreasing waste. Dr. Steve Foster, head of radiology at a large, multispecialty facility in the Midwest of the United States, ran into an issue in the month of November 2005. His medical facility had just purchased three state-of-the-art CT scanners.

Following questions are answered in this case study solution

  1. Draw the process flow map for the original CT scan process. 

  2. Hospital management believed the new scanners represented a high-return; investment. What factors would you take into account when calculating the difference in revenues represented by the new scanners versus the original units? 

  3. If the original process flows remained in place after the new CT scanners were installed, what level of scanning throughput could the hospital achieve? What hourly margins would result from using the new scanners with all other processes unchanged? How do these margins compare with using the old scanners? 

  4. What specific improvements might be made to improve the efficiency of the CT process flows? How would these improvements affect the margins? 

  5. What level of scanning throughput could the hospital achieve after the recommended improvements? What hourly margins would result from using the new scanners with all improvements in place? How would these margins compare with using the old scanners? 

  6. How many hours a day would the new scanners have to operate to handle 92,000 patients per year? Assume that scanners are operated for 300 days in a year. 

  7. If the technology of CT scanners continues to improve, how will process economics impact their purchase and utilization in hospitals and the healthcare system overall?

Case Analysis for Body Scans and Bottlenecks Optimizing Hospital CT Process Flows Case Solution

1. Draw the process flow map for the original CT scan process. 

The practice of Dr. Foster made use of six different single-detector CT equipment. Around 55,000 patients were scanned by using these devices during various shifts throughout the day in 2001. The CT scanner was in use for a total of 32 minutes for each of these scans. The complete CT scanning process took 32 minutes (i.e., the scanner was busy for 32 minutes) because this time frame was considered from the start of the planning process. Figure 1 depicts the initial CT scan procedure as a flowchart; the 17 minutes it took the CT technician to execute each scan is the largest chunk of time. According to the investigation, the radiology department performed 55,000 scans in the year 2001. Hospital expected that each CT scanner would finish the same amount of scans in a year, given that they have six of them and that opening hours are the same each day. It took us 32 minutes to complete the scanning process, and it was discovered that the CT technologist was the bottleneck in the process. The initial procedure calls for the participation of six Nurses and six CT scan techs, whose hourly earnings contribute to the total cost of operation. The method consisted of several steps, including preparing the patient for the scan, doing the scan itself, and recreating the images. Each scan requires the services of one nurse and one CT technologist to complete the necessary responsibilities. The waiting time area was only a minute and 45 seconds away on foot from the room that contained the CT scanner.

2. Hospital management believed the new scanners represented a high-return; investment. What factors would you take into account when calculating the difference in revenues represented by the new scanners versus the original units? 

According to the investigation, the radiology department performed 55,000 scans in the year 2001. We presumed that each CT scanner finished the same number of scans in a year, given that they now have 3 new CT scanners to replace their previous 6 scanners and that opening hours are the same for each scanner. We discovered that the nursing was a bottleneck in the procedure, with the time necessary to refill the difference injector taking 16.5 minutes.

The maximum capacity of the process is 4.3 scans per hour. The total number of scans performed by each CT scanner in a year is 18333, and the total number of opening hours in a year is 2,132. The hourly expense for each scanner is $300, which includes operating expenses and the cost of supplies. In comparison, the hourly revenue for each scanner is $2,150, and the hourly profit is $1,850. The margin of error on contemporary scanners is far higher than the margin of error on older scanners.

Because the radiology department needs to justify a Return on Investment (ROI) for a $2 million purchase of new scans, the hourly margins are essential. It is claimed that the new scanner will scan moving components of the human body, for example, the heart, which gives the department more possibilities for detecting cardiac illnesses with better specificity. Additionally, exhibit 4 demonstrates a growth in the number of scans performed annually in the United States, which indicates that there will be an increase in demand. As a result, the capacity for CT scanning needs to be increased to keep up with the expanding demand. When deciding whether or not to invest in new high-speed scanners, it is extremely vital to take into consideration all of these issues.

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