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Shouldice Hospital Limited

Management Education Programme

Name : ABC Date of Submission: 18.08.2010

18.08.2010 To : Dr Byrnes Shouldice

From : ABC Subject : Report on the visit to Shouldice Hospital to propose options to increase hospital capacity With reference to our meeting at Shouldice hospital and discussion with your department heads, I could understand the operation of your hospital and the challenges faced. Based on the meeting please find attached the report with recommendations.

Executive Summary

Dr. Earl Shouldice pioneered hernia repair technique what is known as the Shouldice method that allows for immediate patient activity following the procedure. By 1982, the procedure was so popular that it led to a 1200 patient wait-list. The challenges faced by the hospital were, first, to find ways to increase capacity while maintaining the same level of care and second, determining the location of the bottle neck responsible for the wait list. After careful analysis of the case keeping in mind the investment required, government regulation and quality of service, possible recommendations that emerge with the first being recommended. 1. Operations on Saturday 2. Adding a new floor

(Number of words 109)


1. 2. 3. 4. 5. 6. 7. 8. 9.

Executive Summary Situation Analysis The Problem Objective The Options Criteria for Evaluation Evaluation of Options The Recommendation Action Plan

Situation Analysis
Shouldice Hospital was established in 1945 by Dr. Earle Shouldice, inventor of the Shouldice repair, developed this innovative technique to help young men who were unable to enlist in the military because of their hernias. His unique repair method improved surgical results and reduced recovery time. After his discharge from army, he started his small hospital and as more & more patients requested operations, he expanded his facilities in Thornbill. The expanded facility was started with 36 bed capacity and later extended to 89 beds. Dr Earle Shouldice passed away in 1965 but the hospital continued to operate under the leadership of Dr Obney with 6850 operations by 1982. Dr Shouldices unique technique allowed surgery to be performed under local anesthesia and pain killers. It also encouraged the patients to walk upto post operative room from the operating table. It also allowed the patients to move around freely in the hospital and share their experiences with other patients. The patients as a part of the daily routine had to come to dining area(with a capacity of only 100 seats) for their meals, which helps them to mix with other patients due for surgery next day and boost their confidence. Patients get discharged from hospital on 4th day from the day of surgery. In the process the hospital created about 1,40,000 satisfied customers. Also the recurrence rate of Shouldice hospital was 0.8%, far lower than their competitors with about 10%. The hospital was popular amongst patients on following counts Great experience Faster recovery Less chance of reoccurrence The hospital was popular amongst surgeons on following counts It gave them time see their children grow Routine activity, not too demanding Higher salaries The hospital was popular amongst nurses on following counts Higher pay scales than other comparable jobs Their major time was spent in counseling activities The success came with some additional challenges of having a backlog of about 1200 patients. Why the backlog? The hospital employed 12 fulltime surgeons, 7 part time assistant, 30 nursing staff and other staff to take care of administrative work. The patients can come to hospital as walk in or with prior appointments. The typical admission process for about 30 to 34 patients started with arriving to hospital, examination by surgeon, health insurance cover check, pathology tests and allotment of room.

The surgeries in 5 operating rooms start by around 7.30 am and take about 45min for a routine case and about 60 to 90 min for a case involving recurrence, on an average 1.1hr per surgery (Exhibit 1). The number of operation varied from 30-36 per day and on average each surgeon performed 3-4 surgeries per day. From 1.00 to 3.00pm some of the surgeons after their surgery examined patients at the clinic. The load on the hospital varied with lull during January & late summer time and contrasted with peak activity in September. With 89 beds and 14 hostel rooms hospital is able to manage peak load of 165 surgeries per week. However with the gaining popularity of the hospital, the number patients waiting for surgery is increasing and is about 1200 nos in January 1983 i.e a wait time of minimum 7 weeks . The process flow of the hospital is shown in Exhibit 2 to indentify the bottle neck. As a proposal to increase the capacity it was debated whether to go for Saturday working which was not liked by four senior doctors and also some of the staff members. Also alternate options came to Dr Byrnes Shouldices mind to resolve the challenge of increasing capacity.

The Problem
The problem that Shouldice hospital is facing is that inspite of having the specialized work force they are unable to meet the demand. The challenge is to increase the capacity of the hospital without compromising on quality?

Utilize the capacity of the hospital to the maximum & reduce the waiting list at the earliest.

A. Add Saturday operations and utilize the existing facility B. Adding a new floor (45 more hospital beds)

Criteria for Evaluation

1. Ensuring the same quality of service 2. Investment 3. Government approvals 4. Discontent amongst Surgeons & Nurses

Evaluation of Options
A. Add Saturday operations and utilize the existing facility The option suggests that the number of working hours for 8 surgeons who are not opposed to Saturday working be reduce by 1 hour that is either they come 1 hour late in morning with afternoon surgery or with morning surgery they close the day by 3.0pm after the clinic hours). The same 5 hours to be compensated on Saturday. Thereby the number of surgeries that can be performed on Saturday can be about 4/day/operation room. Hence the new capacity of hospital becomes 185 surgeries /week. ( Exhibit 3) Advantages a. The Quality can be maintained b. No government approvals required c. The surgeons can spend quality time with their family & see their children grow. d. Assistant surgeon also gets increase in salary by about 10% e. Waitlist reduces faster by 14% Disadvantages a. Investment in employing additional administrative staff and Nurses or additional salary paid to compensate for Saturday working.

B. Adding a new floor

Advantages a. There by the additional surgeries that can be performed in a year, considering 50 weeks in a year, would increase by 2500 Nos (Exhibit 4) b. Easy to control and maintain quality c. The culture and environment can be retained Disadvantages a. Investment of about 2m$ b. The operation rooms become the bottle neck (Exhibit 4), to reach full capacity utilization of 44 surgeries per day. c. Work load on admissions, kitchen, laundry, housekeeping and accounting would increase by 33%. d. Disturbance to patients due to construction activity e. The results would start taking effect only after approx 6-8 months f. Meal hours need to be staggered since canteen capacity is for 100 persons.

Action Plan
1. Inform decision to 8 surgeons who have not opposed to Saturday working 2. Inform decision to assistant surgeons 3. Inform decision to staff with an option to work on Saturday with additional pay 4. Convert Hostel room to equivalent of Hospital bed, in terms of facility 5. Dr Shouldice take up the responsibility to overview the surgeries on Saturday to maintain quality 6. Information to Customers regarding opening of Clinic on Saturdays for 5 hours ( 9 am to 2 pm). 7. Release advertisement in newspaper informing increase in capacity with a note that Shouldice hospital only operates from Thornhill, Canada and no clinics outside Canada.

( Total Number of words 1094)

Exhibit 1
Average time calculation The surgeon is able to complete 4 surgeries in about 5 hours i.e 3 regular with average time of 60 min & 1 case of recurrence with average time of 75 min. Average time = ( (60 min *3 + 75 min)*/4) i.e 63 min or ~1.1 hr

Exhibit 2 Process Flow

Exhibit 3
Number of surgeries on Saturday 5 hour /1.1 hr per surgery = approx 4 surgeries Number of additional surgeries in a week - 4 * 5 = 20 surgeries Capacity for hospital increases from peak of 165 surgeries to 185 surgeries/week Faster clearing of waitlist by 14% Earlier avg capacity - 139 surgeries / week. New avg capacity - 139+20 = 159 surgeries/ week Increase in clearing rate = 159/139 = 14% 0,1,2,3,4 stands for number of days from the day of surgery.

Exhibit 4
Before expansion Number of beds + Hostel Rooms - 89+14 = 134 (Each hostel room is considered as 1 bed) Number of patients admitted during peak period - 33 patients / day Average number of surgeries during peak period - 5.6 i.e 5 to 6 Surgeries / day/ operation room

After Expansion Number of patients that can be admitted Maximum number of surgeries that can be - 44 patients / day - 7 to 8 Surgeries / day/ operation room

performed (Considering 8.5 hours available for surgery with average time for surgery 1.1 hour i.e 8.5/1.1 ) Number of surgeries that can be performed - 40 surgeries/day