Block Time
The COO wants to put a number on the opportunity. Orthopedics has 18 allocated block hours per week at 91% utilization and could fill 6 more hours per week if given the capacity. Neurosurgery has 22 block hours per week at 58% utilization. Assume 48 operating weeks per year and a contribution margin of $1,800 per OR hour for Orthopedics cases. How much annual margin is recovered by shifting 6 hours per week from Neurosurgery to Orthopedics?
Case Exhibit
Rounding is standard practice in case interviews and almost always permitted with a quick ask. Where it simplifies the calculation meaningfully, both the rounded and precise approaches are shown below.
Step 1: Confirm the reallocation does not cut into Neurosurgery's actual case volume
Precise: 22 x 58% = 12.76 hrs used per week, leaving 9.24 hrs idleRounded: 20 x 60% = 12 hrs used per week, leaving 10 hrs idle
Both confirm that shifting 6 hours does not affect any of Neurosurgery's existing cases.
Step 2: Calculate incremental Orthopedics OR hours per year
6 hrs per week x 48 weeks = 288 incremental OR hours per year(Already clean, no rounding needed)
Step 3: Calculate recovered contribution margin
288 hrs x $1,800 per hr = $518,400Rounded: 300 x $1,800 = $540,000
Both land in the same range. In a live case, $518K or ~$520K is the right answer to give.
Step 4: Contextualize the result
The CFO noted each percentage point of system utilization is worth roughly $400K annually. This single reallocation recovers more than one full point on its own. With Neurosurgery, GYN, and ENT all running below 70%, the total reallocation opportunity across all underutilizing specialties is likely $1.5M or more before any day-of execution improvements are addressed.
