Annual Management Report Fiscal Year 2012

Maastricht University School of Business and Economics Maastricht, November 7, 2012 Altrock, Felix Overkamp, Sasha Course code: EBC 4107 Course Tutor: M. Peeters

I6011104 I6001945

Study: Master IB Finance

Executive Summary

Rapidly evolving health care industry transforms the way in which hospitals have to plan their financials, operations and their facility management. The way in which costs are determined, and influenced by exogenous factors, the treatment of patients, and the possibility to manage hospitals facilities have undergone significant changes. New structures and regulations in the health care industry have altered the way in which hospitals have to plan their …show more content…

Analysis
Our study group undertakes Shouldice’s recovery department an intensive cost – profit analysis. We assume that the base case for our analysis is given by the provided information about Shouldice’s operations and financial figures. Following the base case scenario, static inflow pattern, no support by health care insurances, and no use of a mobile diagnosis team, our study group finds that average daily are lowest for a number of 210. With only 210 beds in place the recovery department has an average utilization of 99.88%. The average daily cost equals € 270,455.65 under our simulation, which results in a cut of € 10,825.55. The average bedtime under the base case scenario amounts to 3.5 days.

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Figure 1: Optimal Number of Beds Under Base Case Scenario $300,000.00 Average Daily Costs $250,000.00

$200,000.00

$150,000.00

$100,000.00

$50,000.00

$-­‐

240 230 220 210 200 190 Number of Beds

From the base case scenario we further develop our simulation model implementing more and more important limitation or factors. Firstly, international studies have shown that for hospitals of a comparable size to Shouldice, it is not feasible for reasons of hygiene, health and safety to have more than 15 extra patients. That means that the number of patients