Shouldice Hospital Limited

CASE STUDY ANALYSIS #1 – MKT 771

SARAH CHAN
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Table of Contents
Synopsis..........................................................................................................................................2
Key Issues and Problems...............................................................................................................2
Questions to Assist in Exploring Key Issues and Problems.......................................................2
Alternatives....................................................................................................................................3
Decision Recommendation(s)........................................................................................................4
Reason(s) for Selection of Recommendation(s)...........................................................................5
Risk(s) for Recommendation(s)....................................................................................................6
Action Plan to Implement.............................................................................................................7
Key Lessons Learned.....................................................................................................................8
Sources............................................................................................................................................9
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Synopsis
The Shouldice Hospital specializes in hernia removal and places a large emphasis on patient
experience. The staff pride themselves in cheaper fees and creating an environment that does not
feel like a hospital. They are transparent with their patients regarding operations. Doctors are
experienced and specifically trained in the Shouldice Method. Patients are encouraged to
socialize and exercise throughout their short stay.
There is only one hospital and clinic location in Canada, and a growing demand is pushing them
to expand the use of the Shouldice Method of hernia removal. They are presented with many
different opportunities to expand and grow but are also faced with the associated risks. They are
unsure how to expand without losing their goal of creating the best patient experience possible.
This case explores what opportunity presents the best option that keeps the balance between
successful operations and a positive, unique customer experience.

Key Issues and Problems

 A growing demand for the use of the Shouldice Method in removing hernias is pushing

the hospital to expand

 Shouldice Hospital wants to continue to use this successful method at a high capacity but

also keep the best quality of customer/patient service

 The satisfaction of the staff (doctors, nurses, administrative staff, maintenance workers,

etc.) is crucial in keeping Shouldice Hospital operating successfully

 The hospital relies on word-of-mouth advertising as their only form of marketing

 The hospital staff, not including the doctors, do not follow an organizational chart and

they are trained to do many different jobs for emergency situations

Questions to Assist in Exploring Key Issues and

Problems
 How is success and performance measured?

 What does quality patient service look like at Shouldice Hospital?

 What is the market demanding and to what extent is the demand?

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 Because there is a small amount of staff, how are internal controls implemented and how

are employees kept accountable?

 How is the facility designed for creating a great and comfortable experience for its

patients?

 Are the employees satisfied and how is that measured?

 How are doctors and nurses trained in the Shouldice Method and patient interactions?

 How are other employees trained to do another employee’s job?

 Are other employees qualified to perform other employee’s responsibilities?

 How can the work culture and patient-to-employee dynamic change if Shouldice Hospital

expands and brings on more doctors and other staff?

 What are some options to increase operational capacity?

 What are the risks of pursuing those opportunities?

 What are some marketing strategies that the hospital is willing to implement?

 What are some risks associated with not expanding and making no changes?

Alternatives
To address these problems, there are many alternatives and opportunities that Shouldice Hospital

could pursue. These potential solutions provide ways to increase operating capacity, to create an

effective marketing strategy, or to assure constant, unique patient experiences at this facility.

A small alternative is to no longer allow visits from other doctors. This is essentially done to

make sure that the Shouldice Method is kept among the doctors in Shouldice Hospital, to not

only have control over patient experiences inside and outside the hospital, but to have control

over the reputation and the use of this specific technique.

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Another option for Shouldice Hospital is to operate on Saturdays. Currently, the facility only

performs surgeries on weekdays. But on weekends, the patients who had operations later in the

week can stay and continue to recover. To expand operations to Saturdays, the hospital’s capacity

would increase by 20%. Putting this option into action would be quick and with the right

organization, the hospital can transition into adding another day of operations smoothly. This

would greatly help the hospital treat more patients in need of hernia removals.

Shouldice Hospital could pursue a different method of expansion - building a whole new facility.

This would cost approximately $4 million but will increase the number of beds by 50%. Housing

more patients will mean that there needs to be more times and availability to perform surgeries.

Operating rooms would operate more heavily to accommodate all the new patients occupying the

new space. There would also be an increase in labor investments, possibly with new doctors,

nurses and maintenance personnel. This is also more of a long-term investment and it will take a

while to implement this alternative.

The last alternative is to create an effective marketing strategy. Demand is already growing

because of Shouldice Hospital’s reliance on word-of-mouth advertising. With this as their only

strategy, they can easily lose the demand through one unhappy customer who speaks up about

their experience. If there is a marketing strategy in place, the demand for hernia removals

through the Shouldice Method is stabilized and no longer subject to uncertainties in the

differences in customer experiences.

Decision Recommendation(s)
The decision I would recommend is to expand to a new facility in upstate New York, but while

the new building is under construction, the original facility in Toronto will open its operations to

Saturday. Once the new hospital is built and ready to use, the original hospital will cease
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Saturday operations. This will provide a short-term and long-term alternative to meet demand but

also continue to deliver the best possible patient experience.

Reason(s) for Selection of Recommendation(s)

The most important issue that I believe Shouldice Hospital is facing is their inability to operate at

a higher capacity to meet the increasing demand for this specific technique and unique patient

experience. I believe that Shouldice Hospital prides themselves in the way they operate and how

they are different from other hospitals that also provide hernia removals. By recommending this

alternative, it captures what Shouldice Hospital wants to achieve.

More specifically, the operating capacity will increase from the moment they decide on pursuing

this recommendation. By beginning operations on Saturdays for the period of the construction of

the new building, they already will be increasing their capacity and meeting demand. This is also

a great marketing strategy because they will not have to tell patients to continue waiting because

they are not able to meet the increase demand yet. Capacity will increase by 20% which I believe

is enough to keep patients satisfied for the time that it takes to build the new building.

By building the new building, the bed space will increase by 50% which hopefully be filled

quickly, and more surgeries will be performed. This means that there will be more money

coming in. With the increase in surgeries from the higher demand, the revenues will increase.

This will help generate enough money in a reasonable amount of time to offset the cost of the

building the new facility and help with new staffing and maintenance costs.

The increase in labor is also another reason that I suggest this alternative. Instead of refusing

doctors to come and visit, we can offer full time positions in a place where doctors and nurses

can be properly trained in the Shouldice method to avoid potential risks of misapplication of this
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technique or misleading potential clients. This allows for expansion while still having control

over who specifically has knowledge of this method and how the hospital operates.

Lastly, by maintaining control over quality Shouldice Hospital can continue to provide their

unique patient experience. The current employees can extend their services to the new patients

that come on Saturdays and the new doctors and nurses in the new location will be trained in this

method. It would be time efficient to train the new staff while the new building is being built.

This training will also be helpful in assisting the existing doctors and nurses with the new influx

of patients as well. The new doctors and nurses will then be ready as soon as the new building is

ready for operations and occupation.

Risk(s) for Recommendation(s)

With a new building expansion, there is always risks associated with it. The are many things that

can go wrong and Shouldice Hospital should account for them and be ready to take action is any

of these things happen.

The biggest risk is that of the employees. There are many issues that arise when expanding

operations, the staff should still feel comfortable and able to work harder if needed. With the

increased capacity, all employees will be working more heavily to accommodate the increase in

patients in the facility. This can alter the work environment; employees can become less satisfied

and there is risk of a burn out. This can result in putting the patient’s health at risk, because the

doctors and nurses may be less attentive due to the increased amount of work.

In addition, when the hospital hires new employees this is also another risk that Shouldice

Hospital should be willing to take. New employees can affect the work culture. The current staff

have a close relationship with one another and are transparent in all they do in the hospital. This
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is a key element in the successful operations of this hospital. So, with adding new people to the

team, there is a risk that all the employees will not be able to create those same relationships as

they had before, resulting in a uncollaborative effort from the existing employees and the new

employees.

There is also a risk of not delivering the same quality of patient service. With hiring new staff,

they must know and have been trained very well in the Shouldice Method and its recovery

process to make sure that the new facility delivers that same patient experience.

Another risk is that now the two facilities are not in the same location. This can alter

communications and the uniformity in how both Shouldice Hospitals should operate. The goal of

building another facility is to have more options for patients in location for where they want to

be treated and there should be no difference if they went to one location over another. Therefore,

by having two locations, there is a risk that one location can take actions but not communicate to

the other location.

Additionally, there is a risk of fraud, embezzlement and stealing of confidential information. It is

already a small problem within the original facility in Toronto, because employees are trained to

do another employees job in the case of the emergency. The internal controls and the ability for

employees to go around them is escalated and there is a greater chance of white-collar crime. By

adding new employees and if they receive the same training for emergency situations, this

problem is amplified, so Shouldice Hospital should be aware and prepare for anything that might

happen.
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Action Plan to Implement

The begin this process, the Executive Board needs to meet and create a plan. This will help with

organization and allow employees to know about new schedules, updates and procedures. In the

short-term, the hospital should take action to set up a schedule for the doctors and nurses for

Saturday operations. This schedule should add a little more work but should also be on a

rotational business to not put too much pressure on one or two specific employees. By spreading

out the work among current employees, this should increase capacity while maintain employee

work-life balance.

In the medium term, this would be during the construction of the new facility. The hiring process

should begin, and once we hire new personnel, training begins right away in the Toronto hospital

and clinic. This is important that this process is done in a timely manner but not rushed. The new

employees need to know how Shouldice Hospital runs and how there needs to be a uniform

performance in each location.

For the long-term, this is start when the new facility is constructed. This is a long-term

investment, so the new doctors, nurses, and other staff will be ready to start and begin working

on new patients. Over time, this should help with meeting the increasing demand. After a while,

if demand is still increasing, there should be another reevaluation of possible alternatives on how

to expand even more in the future.

Key Lessons Learned

 Communication is very important to having a uniform patient experience over multiple

hospital locations
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 Choosing a single alternative might not solve all the problems and issues you are having

– but you should choose one that best fits your most valued needs and can overall

improve the success of the hospital

 Before making a decision that can impact the success of your business, make sure you are

aware of all potential risks and how significant they might be

Sources
Heskett, James, and Roger Hallowell. Shouldice Hospital Limited (Abridged). Harvard Business

School, 2005. Accessed 6 Sept. 2019.