Shouldice Case 29.01.

2019

by Ankit & Nand

History

Dr Edward Earle Shouldice graduated from the University of Toronto in 1916.

• During World War II, he was called to serve on the Medical Examining Board.
• Dr. Shouldice, a major in the army, found that many young men willing to serve their country had to be
denied enlistment. These men needed surgical treatment to repair their hernias before they could be
pronounced physically fit for military training.

In 1940, hospital space and doctors were scarce, especially for this non-emergency surgery
• Contributing his services at no fee, he performed an innovative method of surgery on seventy of these
men.
• The delighted recruits soon made known their success stories and by the war's end, more than 200
civilians had contacted the doctor and were awaiting surgery.

The scarcity of hospitals beds however, created a major problem. There was only one solution
Dr. Shouldice decided to open his own hospital.

• Location: The hospital was located in Toronto in the southern part of Canada.

BOOKING A SURGERY

• Patients living within 100 km (60 miles) from the hospital should come to the office for a personal
examination.
• Examination Hours are: Monday to Friday- WALK IN CLINIC, NO APPOINTMENT NECESSARY from 9:30
am to 3:30 pm Saturday: BY APPOINTMENT ONLY from 10:00 am to 2:00 pm.

For patients living at a greater distance who wish to arrange an examination, admission and operation all
in one visit, please complete Questionnaires 1 and 2 by taking the following steps:
• Step 1. Click on Medical Information and print the questionnaire on your printer.
• Step 2. Return to the Booking for Surgery page, click on Insurance Information, and print it on your
printer.
• Step 3. Complete all documents as required and forward by fax (905-889-4216) or regular mail to our
office.
• Upon receipt of your completed documents, a surgeon will review the information, and office will make
the necessary arrangements to schedule you for surgery.
• Please allow two to three business days for processing

SHOULDICE UNIQUE OPERATING METHOD

• There is no use of foreign bodies such as synthetic screens or meshes, except in extremely rare cases
where there has been destruction of the tissue usually due to previous surgery.
• The vast majority of our hernia repairs are done with a sedative (sleeping pill), analgesic (pain relief pill)
and local anesthesia. If necessary, additional medication is administered.
• The youngest patient to date was a child of 4 months, while the oldest was a man of 100 years.

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 Shouldice Case 29.01.2019

by Ankit & Nand

Shouldice Business Process: 4 Day Lead Time

Day-1

30/36 Check If ok:

Bloo Explain Tea &
Arrival by MD check Dinner at
d proces cookies
s 1- (15min -in & 6 pm
test s steps @ 9pm
3pm s) admi
n

Day-2

Local Start Explai

Surger Rest Dinner Tea &
anesthes eating n
y (40 (2-3 at 6 cookies
ia (-20 &mov proces
mns) hrs) pm @ 9pm
mns) ing s steps

Day-3

Dinner Tea &

Loosen stitches Walk, Play & eat with buddies at 6 cookies
pm @ 9pm

Day-4
Remove stitches, Walk, Play, Eat, Check-out

THE NURSES’ EXPERIENCE

• Shouldice appoints 34 full time equivalent nurses for a 24-hour period.

• During non-operating only 6 full time equivalent nurses were present in the premises.
• Performed counseling activities.

THE DOCTORS’ EXPERIENCE

• 12 full time surgeons

• 8 part time assistant surgeons.
• Each operating team required: A surgeon, An assistant surgeon, A scrub nurse, A circulating nurse

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 Shouldice Case 29.01.2019

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WORK LOAD

• A total of 30 to 36 operations were conducted per day.

• Each surgeon performed three or four operations a day.
• A surgeon’s day ended by 4 p.m.

THE FACALITY AT SHOULDICE HOSPITAL

• Two facilities in one building

Hospital
Clinic
• The patients at the Shouldice center take some of care of themselves.
• In Shouldice, all the patients were encouraged to walk up and down the halls and to get in dialog with
the other patients and the surgeons. In thought of encouraging the patients, the steps between the floors
are constructed with a smooth inclination,
• there are not TV’s at the bedrooms and the rooms were designed as if it were a home instead of a
hospital.
• Every square foot of facility is carpeted to reduce the hospital feeling and the possibility of a fall.
• Patients and staff are served food prepared in the same kitchen.

Cost Comparison:

Shouldice vs. Other Hospitals

Costs of typical operations $954 $2000-4000

Transportation $200-600 $0

Time Lost from work in Hospital 4 days 5 days

Time lost from work while recovering 5 days 10 days

Value of time lost (ranging from $50 to 500 per day) $450-4500 $750-7500

Total before Allowance for recurrence $1604-6054 $2750-11500

Probability of Recurrence 0.80% 10.00%

Expected Cost of Recurrence $13-48 $275-1150

Total cost to patient, employee and insurer $1,617-6,102 $3,025-12,650

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 Shouldice Case 29.01.2019

by Ankit & Nand

ABOUT THE PROFITABILITY OF Hospital:

HOSPITAL

Revenues (in $) (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) X6,850) 3,596,250

Cost 2,000,000
Profit 1,596,250
Total Profit 1,837,650

How well is the hospital currently utilizing its beds?

Using the Capacity utilization rate formula on the data given on the table, these are the following beds
used per day and subsequently per week that we got:
Monday 60/90 66%

Tuesday 90/90 100%

Wednesday 90/90 100%

Thursday 90/90 100%

Friday 60/90 66%

Saturday 30/90 33%

Sunday 30/90 33%

Then, using the data’s given to compute for the per week computation, we got:
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 available beds = 71.43%

The hospital is currently utilizing 71.43% of their beds, the level of utilization is actually an ideal operating
point. To increase its rate of utilization might decrease the service quality. This also gives flexibility to the
operations for unforeseen events.

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 Shouldice Case 29.01.2019

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Capacity Enhancement Alternatives

1. Add Saturday operations

2. Add a new floor (45 more hospital beds)
3. Establish a new facility for hernia
4. Expand to other types of operations

Option-1- Add Saturday operations

Advantages

– No investment is needed
– Can still maintain quality

Disadvantages

– Require to schedule 23-25 operations on Saturday

– Six surgeons and a supervising surgeon have to work on Saturdays
– Additional other personnel
– Violates the implied contract that Shouldice has with its surgeons, strong opposition by the senior
doctors

Option-2- Adding new floor

Advantages

– Easy to control and maintain quality

– Retain the culture and environment

Disadvantages

– Require to schedule doctors to the full capacity of five days per week
– Increase work load on admissions, kitchen, laundry, housekeeping and accounting
– Further staggering of meal hours for patients (100 seat dining room)
– Disruption during construction

Option-3- Establish a new facility for hernia

Advantages

– New location close to the customers, say USA

– Improve its competitive position and increase its profits
– Operate in a less restrictive environment

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– New Opportunities for existing personnel
– Transfer of knowledge and expertise to the new facilities

Disadvantages

– Requires a significant investment.

– Control of quality
– It is difficult to create the same culture and atmosphere
– Potential competition with the existing facility

A capacity analysis
• Shouldice has the capacity to perform 42 examinations/afternoon & send 38 eligible patients to the
operations rooms. However, it only performs 33 operations/day, so the bottleneck between these
2 processess is the no of operations performed/day.

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