If you’ve ever taken the subway in New York from Grand Central Station, you’ve witnessed a highly efficient capacity utilization model. As soon as the line at one turnstile gets a little shorter than the others, transit riders immediately shift over to it, and whatever surplus capacity was there takes a split second to disappear. What if there was a way you could efficiently fill some of your health system’s excess capacity?
Capacity utilization is a way to measure productivity in manufacturing and other industries. The formula to calculate capacity utilization is: (Actual Output) / (Potential Output) multiplied by 100. “It is a good indicator of business and market conditions, as when times are good, most plants are able to run at close to 70 to 80 percent capacity utilization, and in some cases all the way up to 100 percent,” according to lean manufacture.net.
“All hospitals are going to have a certain natural level of use of their capacity,” says Sandra Fancher, chief strategy officer at MedTouch. “If you apply marketing on top of that, can you change that by a measurable percentage? For some service lines, a one percent difference in utilization has massive benefits.”
Read our new article for a look at “capacity-based marketing,” a methodology that identifies opportunities in real time or in the near future and diverts marketing resources to where they can make the greatest impact.
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