Shouldice Hospital Case Study

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1.0Description of Situation and Identification of Problems 1.1 Service
The Shouldice Hospital competitive advantage is that it only conducts external hernia operations and is specifically designed and operated to provide the highest probabilities for successful treatment with “country club like” patient service. Hernia operations typically have a 90% success rate, with Shouldice hernia operations boasting over a 99% success rate. The Shouldice competitive advantage can be summarized into: Surgical technique: layered/increased sutured repair technique conducted via local anesthesia Postoperative regimen and facility design supporting early/ongoing ambulation and socialization Comprehensive and “country club like” location patient service HR structure supporting engaged experienced employees with high morale As shown in Exhibit 1, the clinic generates nearly $3M in annual profits. The Shouldice model is a very profitable model while delivering a higher quality hernia repair service at half the cost. Referring to Exhibit 2 and 3, a Shouldice patient total cost of approximately $3000 compares to the industry average hernia repair total cost of approximately $6000.

1.2 Description of Process
The patient experience at Shouldice consists of an orientation, tea, friendly supportive staff throughout the stay (hernia operation / recovery) all while patients socialize and relax. This is followed by free annual checkups and annual patient reunions at half the cost. A Shouldice Hospital process flow chart is provided in Exhibit 4, followed with a very regimented and efficient protocol, reinforced with training, work procedures, intensive management/oversight and is supported by experienced staff. When evaluating the process, a current bed capacity bottleneck is identified with occasional early discharges and hostel beds used for overflow.

1.3 Service Facility
Shouldice Hospital is conveniently located close to metropolitan Toronto, just 15miles outside the city, on a sprawling relaxing countryside acreage in a renovated mansion. The Shouldice location is convenient for supplies, equipment, staff and both local and travelling patients. The hospital is functionally designed with thoughtfully planned features such as low rise stairs conducive to early and ongoing post operative ambulation, but also carpeted for a comfortable, country club vacation feel.

1.4 Operating Control Systems
Alan O’Dell is the hospital administrator overseeing 91 employees and five departments. The Shouldice management team consists of Dr Shouldice leading the six person executive committee and senior surgeon Dr Obney who leads the surgery team and also chairs the seven person Board of Directors. The “focused factory” service delivery system minimizes “hospital” atmosphere with the country location, mansion decor and pre/post operative regimens. The regimens encourage patient self-care and socialization supported by design features such as low rise stairs and common TV and telephone areas patient need to travel to. The examination and operating room locations are structured to encourage staff interaction, communication and efficiency of resource use.

The Shouldice marketing model is based on word of mouth. Shouldice has actually procrastinated issuing their most recent promotional pamphlets due to a concern over increasingly overburdened wait lists. The hospital also conducts customer satisfaction surveys looking for opportunities for improvement.

1.5 Work Force
The 91 Shouldice employees are non-unionized, earn higher than average wages and participate in profit sharing. Shouldice hospital workforce performance management follows a “no termination” policy supported by a coaching, training and rehabilitation programs. Shouldice hospital believes that staff need work-life balance, and staff work Monday to Friday regular hours with very little on-call. As a consequence, Shouldice has extremely low turnover,...
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