Shouldice Hospital
1. How successful is the Shouldice Hospital? Generate a P&L statement using available information from the case. Treat each of the two operations—hospital and the surgery—separately.
Hospital:
Revenues (4 days X $111/day x 6,850 patients/year) 3,041,400
Cost 2,800,000
Profit: 241,400
Clinic:
Revenues ((($450 + 60 + 75) X 0.20) X 6,850 patients/year)) 3,596,250
Cost 2,000,000
Profit 1,596,250
Total Profit 1,837,650
2. How do you account for its successful performance?
The following factors account for the success of Shouldice hospital:
• Unique and pioneering surgical technique for Hernia operation which reduced the suffering of the patients and led to rapid recovery as compared to the existing methods. The Shouldice technique enabled the patients to resume their normal routine and jobs in a much shorter period of time (one to four weeks) as compared to other hospitals (two to eight weeks). This technique resulted in 140,000 highly satisfied “Alumni”(past patients).
• Doctors could conduct 600 operations in a year as compared to 25 to 50 operations per year in other hospitals, which was possible by the standardization of operating procedures. This standardization led to efficient utilization of the medical staff and other resources.
• To adhere to the Shouldice technique and match the value system with that of the hospital, experienced doctors and nursing staff were recruited carefully.
• Due to the following techniques adopted by Shouldice created a warm and welcoming environment for patients: o Carpeting the hospital gave the place smell other than that of disinfectant o Encouraged interaction and recreational activities amongst patients and also with the hospital staff o Matching of roommates based on similar background and the scheduling of their operation at the same time are examples and care exerted to create a friendly environment which led to faster recuperation
o
Hospital:
Revenues (4 days X $111/day x 6,850 patients/year) 3,041,400
Cost 2,800,000
Profit: 241,400
Clinic:
Revenues ((($450 + 60 + 75) X 0.20) X 6,850 patients/year)) 3,596,250
Cost 2,000,000
Profit 1,596,250
Total Profit 1,837,650
2. How do you account for its successful performance?
The following factors account for the success of Shouldice hospital:
• Unique and pioneering surgical technique for Hernia operation which reduced the suffering of the patients and led to rapid recovery as compared to the existing methods. The Shouldice technique enabled the patients to resume their normal routine and jobs in a much shorter period of time (one to four weeks) as compared to other hospitals (two to eight weeks). This technique resulted in 140,000 highly satisfied “Alumni”(past patients).
• Doctors could conduct 600 operations in a year as compared to 25 to 50 operations per year in other hospitals, which was possible by the standardization of operating procedures. This standardization led to efficient utilization of the medical staff and other resources.
• To adhere to the Shouldice technique and match the value system with that of the hospital, experienced doctors and nursing staff were recruited carefully.
• Due to the following techniques adopted by Shouldice created a warm and welcoming environment for patients: o Carpeting the hospital gave the place smell other than that of disinfectant o Encouraged interaction and recreational activities amongst patients and also with the hospital staff o Matching of roommates based on similar background and the scheduling of their operation at the same time are examples and care exerted to create a friendly environment which led to faster recuperation
o