HADM 6100 Chapter 8 Questions With
Complete Solutions
13B: Operationally, which hospital is performing
better? Why?
Hospital A
discharges in 2016 (D) = 12,051
days of care in 2016 (DC) = 72,421
to calculate the average length of stay (ALS)
for hospital A we use the following formula:
ALS=DC/D =72,421/12,051
The average length of stay in hospital A is 6.01
days.
Hospital B
discharges in 2016 (D) = 9,230
days of care in 2016 (DC) = 51,684
to calculate the average length of stay (ALS)
for hospital B we use the following formula:
ALS=DC/D = 51,684/9,230
The average length of stay in hospital B is 5.6
days.
,13C: Do you think the nonprofit hospital is meeting
its community benefit obligations in exchange for
its tax-exempt status? Explain.
C: To determine whether the nonprofit hospital has
fulfilled its obligations to its community we need to
calculate the percentage of its revenue that goes
into community benefits.
revenue of nonprofit hospital A = $ 45 755 000
revenue of proprietary hospital B= $ 35 800 000
community benefits value of hospital A= $ 5 000
000
community benefits value of hospital B= $ 3 500
000
Fraction of revenue: community benefits of A/
revenue of nonprofit hospital A
5,000,000/45,755,000=0.109= 10.9%
10.9% of the revenue of nonprofit hospital A went
toward community benefits.
Fraction of revenue: community benefits of B/
revenue of nonprofit hospital B
3,500,000/35,800,000=0.098= 9.8%
9.8% of the revenue of nonprofit hospital B went
toward community benefits.
, When we compare the two hospitals, we can see
that the nonprofit hospital allotted a mere 1%
more of its revenue towards community benefits
than the proprietary hospital. It is obvious that
more of the revenue of the nonprofit hospital
should be allotted to its community benefits
considering its tax-exempt status.
13D: Do you think the hospitals have a problem
with excess capacity? If so, what would you
recommend?
D. To determine whether either, hospital A or
hospital B, has excess capacity, we need to
determine the average daily
census and occupancy rate for each of them.
Hospital A
total inpatient days (TD) = 72,741
days in 2016 (D) = 366
total beds (B) = 320
ADC=TD/D= 72,741/366
average daily census for hospital A is 198.75.
OR=ADC/B=198.75/320
occupancy rate for hospital A is 62.1%.
- If we take a look at the occupancy rate for
hospital A, we can see that it is not utilizing the full
Complete Solutions
13B: Operationally, which hospital is performing
better? Why?
Hospital A
discharges in 2016 (D) = 12,051
days of care in 2016 (DC) = 72,421
to calculate the average length of stay (ALS)
for hospital A we use the following formula:
ALS=DC/D =72,421/12,051
The average length of stay in hospital A is 6.01
days.
Hospital B
discharges in 2016 (D) = 9,230
days of care in 2016 (DC) = 51,684
to calculate the average length of stay (ALS)
for hospital B we use the following formula:
ALS=DC/D = 51,684/9,230
The average length of stay in hospital B is 5.6
days.
,13C: Do you think the nonprofit hospital is meeting
its community benefit obligations in exchange for
its tax-exempt status? Explain.
C: To determine whether the nonprofit hospital has
fulfilled its obligations to its community we need to
calculate the percentage of its revenue that goes
into community benefits.
revenue of nonprofit hospital A = $ 45 755 000
revenue of proprietary hospital B= $ 35 800 000
community benefits value of hospital A= $ 5 000
000
community benefits value of hospital B= $ 3 500
000
Fraction of revenue: community benefits of A/
revenue of nonprofit hospital A
5,000,000/45,755,000=0.109= 10.9%
10.9% of the revenue of nonprofit hospital A went
toward community benefits.
Fraction of revenue: community benefits of B/
revenue of nonprofit hospital B
3,500,000/35,800,000=0.098= 9.8%
9.8% of the revenue of nonprofit hospital B went
toward community benefits.
, When we compare the two hospitals, we can see
that the nonprofit hospital allotted a mere 1%
more of its revenue towards community benefits
than the proprietary hospital. It is obvious that
more of the revenue of the nonprofit hospital
should be allotted to its community benefits
considering its tax-exempt status.
13D: Do you think the hospitals have a problem
with excess capacity? If so, what would you
recommend?
D. To determine whether either, hospital A or
hospital B, has excess capacity, we need to
determine the average daily
census and occupancy rate for each of them.
Hospital A
total inpatient days (TD) = 72,741
days in 2016 (D) = 366
total beds (B) = 320
ADC=TD/D= 72,741/366
average daily census for hospital A is 198.75.
OR=ADC/B=198.75/320
occupancy rate for hospital A is 62.1%.
- If we take a look at the occupancy rate for
hospital A, we can see that it is not utilizing the full
