Capacity Planning - Hospital Departments

Capacity Planning is the most important "modelling" requirement of every organisation. The demand for services in a hospital has to be managed to ensure there are enough clinicians and ancillary staff on duty and on call to deliver the range of services provided at the time they are needed. If there are not enough staff then patients wait longer. If there are too many staff relative to patient attends, there is a potential excess in cost relative to the demand for care. The problem is to manage cost relative to short term "fluctuations" in demand and is the same issue that faces every organisation that has to manage a finite cost budget relative to variable demand.

Excess cost can result when there is a "mis-match" between the demand for the services and the level of resource fielded to deliver it. In the NHS, SYSTEM 21 has consistently identified that a significant cause of excess cost, relative to demand for services, occurs when staff are in place to carry out their duties of patient care, but for some reason there has been a cancellation, or rescheduling of patients that has meant the staff are there, but the patients are not. In the NHS, the scheduling process is complicated by what is understood by " Establishment hours" and the daily actual hours required.

The "mis-match" issue is the same, for example, as a manufacturing business expecting an increase in demand, bringing in labour resource too early and then gradually increasing its productivity purely as a result of increased volume, rather than any managed reduction in cost.

Effective capacity planning will produce a detailed understanding of the entire operational requirement relative to demand for products or services. The Capacity Plan starts with a seasonally adjusted expectation of the demand pattern for the organisation's "outputs - i.e. its service provision or its product delivery to its customers.

SYSTEM 21 specialises in the development and planning of "Optimised" Capacity

Unintentional "overspend" against challenging budgets is a fairly common finding by SYSTEM 21 in UK hospitals but much better control can be achieved using more sophisticated planning techniques that are commonplace in industry and in private companies where excess costs would lead to the failure of the business. There is a point somewhere between the two models that will reduce the excess costs incurred in hospitals without any misconception that it was being run as a business.

There are two elements to capacity planning - "Macro" and "Micro". Macro planning will produce a capacity plan for the whole hospital, with resource allocation, financial costs and growth trends etc for the full financial year and beyond. The "Micro" plan will enable resources to be planned against shorter timescales - a month, a week, a day etc.

If too much resource cost is planned (or rather, not planned ) against a short term drop in activity, the cost ratio is too high and leads to overspend. This has major impact on a hospital and presents a threat to its workforce in the medium and long term. It is therefore important to get this planning right if both the hospital and its workforce are to be protected.

Our specialist teams gather together volume projections, footfall seasonality patterns and historic trends to determine the activity level required. In the NHS this is directly linked to patient waiting times and the level of perceived patient experience.

SYSTEM 21 will then produce a detailed optimised programme of resource requirement, matching the activity level with service demand and taking account of the level of sickness, absence and Friends and Family Policy. . The Capacity Plan drives the annual budget, monthly performance measurement and daily / weekly planning cycles.

Capacity plans can also be used as a diagnostic tool to assess the capability of a business, review "bottlenecks" in specific parts of the organisation, or to make rapid and accurate adjustments to costs in line with a change in volumes. All organisations need to be able to "react fast" in all departments and the ability to adjust the short and long term capacity planning model is invaluable as a "protection" to the workforce.. Wasted cost means the budget allowed for labour cost is reduced in the future. Preventing this means getting control over the cost "today" and especially, " tomorrow".

Contact us to understand how our inspired capacity planning techniques can deliver scheduling methods that are "most likely to meet service requirements, within the budget provided.", or send us an email to



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