# CASE ANALYSIS: SHOULDICE HOSPITAL LIMITED

Shouldice Hospital &acirc; A Cut Above 1. How well is the hospital currently utilizing its beds? 2. Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day.) How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients? 3. Now look at the effect of increasing the number of beds by 50 percent. How many operations could the hospital perform per day before running out of bed capacity? (Assume operations are performed five days per week, with the same number performed on each day.) How well would the new resources be utilized relative to the current operation? Could the hospital really perform this many operations? Why? (Hint: Look at the capacity of the 12 surgeons and the five operating rooms.)
Shouldice Hospital Case

1.) How well is the hospital currently utilizing its bed?

90 beds x 7 days/ week = 630 beds available in a week 30 patients x 3 days x 5 days per week = 450 beds utilized

450 beds utilized / 630 availble beds = 71.43%

The hospital is currently utilizing 71.43% of their beds, this is actually an ideal operating point. To increase its rate of utilization might decrease the service quality.

2.) Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day.)

Check-in Day Monday Sunday

Tuesday

Wednesday

Thursday

Friday Saturday

Monday Tuesday Wednesday Thursday Friday 30 Saturday Sunday 30 Total 60 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 90 30 90 90 90 60 60 How would this affect the utilization of the bed capacity? Is this capacity sufficient Executive Summary: The Shouldice Hospital. Canada is a pioneer in the field of treating patients suffering from external abdominal hernia. it is proposed that the capacity of the hospital be increased by scheduling the operations on Saturdays also. To implement the solution discussed above. The issues that confront the hospital management are: ·Deciding on ways to meet the backlog of operations. by expanding the hospital's capacity.Obney. Ontario. awareness must be created among all the employees by means of workshops etc. At the same time a successor to Dr. After analyzing various plans of actions. first of all. ·Handling piracy and bad mouthing due to piracy.. while still maintaining control over the overall quality of service delivered. Obney must also be selected. This solution seems like the most feasible in terms of cost and time and also leverages the existing strength of the hospital in providing quality services to the patients. about the urgent need for such a step to expand capacity. The speedy ambulation coupled with its reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth. . The selection of the new chief surgeon must be done by carefully scrutinizing all the surgeons in the hospital as well as interviewing new candidates for the same. ·Selection of the next chief surgeon after Dr. The administrative processes in the hospital must be made computerized to improve their efficiency.

Obney. Many clinics or doctors claim to use the Shouldice technique or the Canadian method and in the eventuality of the operation performed by them being unsuccessful it brings a bad name to the Shouldice Hospital. . it can treat 6850 patients annually. ensuring good patient experience. -To remain the leader in the medical field of hernia operations. ·The next chief surgeon after Dr.Proper training for using them must also be imparted to the employees. Long term: -To sustain quality in their services. ·The issue of piracy and bad mouthing due to piracy are also important concerns for the hospital. At the same time. has to be selected. and on an average each patient has to spend four days in the hospital recuperating. The issues that confront the hospital management can be primarily listed as follows: ·Deciding on ways to meet the backlog of operations. The speedy ambulation coupled with its reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth. the chief surgeon who is to retire soon. patients tend to go to other doctors for operations. retaining the existing talent pool of doctors and attracting newer doctors willing to learn the specialized hernia operations skill is also a primary issue. The hospital is having a successful run as a niche player catering to the demand for treatment of hernia patients. then opening an additional facility in some other geographical location. who is due to retire soon. such as the US of A may be considered. while still maintaining control over the overall quality of service delivered. Canada is a pioneer in the field of treating patients suffering from external abdominal hernia. Situational Analysis and Problem Definition: The Shouldice Hospital. Because of an increasing backlog. The primary issue here is deciding on the manner in which the capacity should be increased without diluting the quality of service rendered. there is a huge backlog that the hospital needs to meet. If it is not possible to increase capacity beyond a certain limit due to the above plan and the backlog list continues to expand. -To select a successor for Dr. With its current capacity. The USP of the Shouldice Hospital is its distinct surgical procedure. The patients are treated using the operated upon using the Shouldice Method. by expanding the hospital's capacity. Obney. Ontario. Long Term and Short Term Objectives: Short term: -To clear the backlog by increasing capacity of the hospital services. In spite of this.

Expansion into other geographical locations such as the United States could be undertaken. with an investment of \$2 million and permission from the provincial government.Another alternative could be scheduling operations at other times during the day too. This would expand the number of beds by 50% and result in scheduling the operation rooms more heavily. 2. Alternatives: 1. it must be ensured that the plans be implemented as swiftly as possible. The decision with regard to the issues at hand must ensure that the employees are receptive in accepting that decision. Also diversification into other related medical fields of surgery such as eye surgery. In case a specialized doctor from outside is appointed.one option maybe to transfer 6 of the 12 specialized surgeons to the new facility. -The action plan implemented must adhere to the government regulations regarding the profitability of hospitals. -There is an atmosphere of concern for the employees in the hospital. Evaluation Criteria: -Whatever step is taken. proper induction to acquaint the existing surgeons must be carried out. Hence any step taken must be cost effective. This can be implemented by having doctors and other medical staff to work in shifts.The successor to Dr. -The solution implemented must be economically viable. -To ensure working towards goal of profitability while at the same time serving the society by passing on the proper knowledge of the Shouldice technique to other surgeons. it must ensure that there is no dilution in the quality of the services rendered by the hospital.-To maintain the brand equity associated with the specialized technique of Shouldice Method for performing hernia operations. For having a quality level in the new facility equivalent to that as in the current Hospital facility at Canada. The selection of such a candidate should preferably be done among the existing doctors in the hospital. -Also because of the increasing wait lists of patients to be attended to. 5. 4.leading to a 20% increase in existing capacity. and hemorrhoids is possible. . by utilizing the capacity of the operation theatres to the optimum level. varicose veins. Obney as Chief Surgeon has to be selected. -The existing strengths of the hospital setup must be leveraged in any decision taken. 3.An additional floor of rooms could be added to the hospital.Capacity of the hospital could be expanded by scheduling operations on Saturdays also.

awareness must be created among all the employees about the urgent need for such a step to expand capacity. The administrative processes in the hospital must be made computerized to improve their efficiency. Plan of Action: To implement the solution discussed above. Obney. that is whether they are open on Saturdays or not.. i. first of all.2 and 3) and time and also leverages the existing strength of the hospital in providing quality services to the patients. The selection of the new chief surgeon must be done by carefully scrutinizing all the surgeons in the hospital as well as interviewing new candidates for the same. Proper training for using them must also be imparted to the employees. then plan 3 may be considered. Also no information is forthcoming about the market status of other hospitals.e. the USA. This bit of information is likely to hasten our decision making proces s. Contingency Plan: If it is not possible to increase capacity beyond a certain limit due to the above plan and the backlog list continues to expand. This would need some capital expenditure but at the same time will help us expand our capacity into another geographical location. Workshops for the same will help dispel any fears in the minds of the existing staff. EXHIBITS Exhibit 1 : Average Cost borne by patient Charges for 4 day hospital stay= \$111 per da y Surgical fee = \$450 Fees for Assistant Surgeon = \$60 Fees for Anesthetic= \$75 . Information Adequacy Issues: There is insufficient amount of information given in the case about the internal dynamics of the hospital vis a vis the issue of the successor to Dr.

8 million / 6850 = \$ 701 .25 Total Cost borne by patient over four days = \$1029 (assuming patie nt takes our days for recovery) Exhibit 2 : Average Cost per patient borne by the Shouldice Hospit al Budget for operating costs For hospital= \$ 2.(assuming all patien ts use anesthetic) Total cost excluding hospital stay = 450+60+75 = \$585 Total Cost borne by patien t per day = 585/4 + 111 = \$257.8 million Total number of operations performed in 1982 = 6850 Hence Average Cost per patient borne by the hospital = \$ 4.8 million For clinic = \$ 2 million Total budget fo r operating costs= \$ 4.

number of operations per day= 6850/261 = 27 Hence net profit increase per year = 328 * 27 * 52 = \$ 0.701 = \$328 By working on Saturdays we are increasing the working days by 52. No of operations per year = 6850 No of working days per year = 261 Hence.46 million case analysis shouldice hospital limited executive summary shouldice hos pital ontario canada pioneer field treating patients suffering from external abdominal hernia speedy ambulation coupled with reasonable price rates leads satisfied patients publicizing hospital word m outh issues that confront management deciding ways meet backlog operations expanding capacity while still maintaining control over overall quality service delivered handling piracy mouthing piracy sel .Exhibit 3 : Net profit increa se using proposed solution Net profit per patient = 1029 .

ection next chief surgeon after obney after analyzing various plans actions proposed that capacity i ncreased scheduling operations saturdays also same time successor obney must also selected this solu tion seems like most feasible terms cost time also leverages existing strength providing quality ser vices patients implement solution discussed above first awareness must created among employees means workshops about urgent need such step expand capacity selection chief surgeon must done carefully s crutinizing surgeons well interviewing candidates same administrative processes made computerized im prove their efficiency proper training using them imparted employees possible increase beyond certai n limit above plan backlog list continues expand then opening additional facility some other geograp hical location such considered situational analysis problem definition shouldice ontario canada pion eer field treating suffering from external abdominal hernia with current treat annually treated usin g operated upon using method average each patient spend four days recuperating distinct surgical pro cedure speedy ambulation coupled with reasonable price rates leads satisfied publicizing word mouth having successful niche player catering demand treatment hernia spite this there huge backlog that n eeds meet because increasing tend other doctors operations issues confront management primarily list ed follows deciding ways meet expanding while still maintaining control over overall quality service delivered primary issue here deciding manner which should increased without diluting service render ed issue piracy mouthing important concerns many clinics doctors claim technique canadian method eventuality operation performed them being unsuccessful brings name next chief surgeon after obney reti re soon selected same time retaining existing talent pool doctors attracting newer willing learn spe cialized skill primary issue long term short term objectives short term clear increasing services se lect successor retire soon long sustain their services ensuring good patient experience remain leade r medical field maintain brand equity associated specialized technique method performing ensure work ing towards goal profitability while serving society passing proper knowledge technique other surgeo ns evaluation criteria whatever step taken ensure there dilution rendered action plan implemented ad here government regulations regarding profitability hospitals solution implemented economically viab .