Shouldice Hospital Case Operation Management - 2

Presented by: Abhishek Kumar(03) Abhishek Reddy(05) Chandan Kumar(11) Naureen Fatima(34) Rajendra Sahane(50)
25-Mar-14 IIM Raipur 1

Hernia Overview

A hernia is a sac formed by the lining of the abdominal cavity (peritoneum). The sac comes through a hole or weak area in the fascia, the strong layer of the abdominal wall that surrounds the muscle.

SHOULDICE HOSPITAL LIMITED

25-Mar-14 IIM Raipur 2

Overview Overview
Founder: Dr. Edward Earle Shouldice Corporate Name: Shouldice Hospital Limited Location: The hospital was located in Toronto in the southern part of Canada. Specialty: Abdominal Wall Hernia Repairs

Dr. Edward Earle Shouldice

SHOULDICE HOSPITAL LIMITED

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Shouldice Hospital
Provides both clinical and operational facilities. Unique Specialized method Shouldice Method developed to operate Harnea. Operations regarded as simplicity of the surgery. Peace of Mind/ low risk/ low recurrence Friendly, social, homely and relaxing environment No competition among doctors More of a vacation rather than treatment

Parents gets free accommodation at Shouldice so that the cost of nursing is saved and can take better care of their offspring.

SHOULDICE HOSPITAL LIMITED

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Shouldice Hospital
Careful recruitment of employees Doctors and nurses are highly trained to help and counsel patients No one is fired! Turnover is low

Staff is non-union
Pay scale is higher than the competition Profit sharing plans are in place for doctors and staff Cross-training & teamwork are strong Managing director stays late one night per week to interact with patients and staff

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Shouldice Hospital
Rooms are not equipped with phone or TV. Patients must travel to make a phone call, watch TV,socialize, eat, etc. Small rise stairways make it easier on patients who have just completed surgery.

Carpeting makes it feel warm and comfortable. Patients and staff eat together in the cafeteria. Foods are all fresh ingredients and prepared from scratch. BOOKING A SURGERY:

Patients living within 100 km (60 miles) from the hospital should come to office for a personal examination.
For patients living at a greater distance were diagnosed by mail using Medical Information Questionnaire shown in Exhibit:1
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SHOULDICE HOSPITAL LIMITED

Shouldice Service Model 4 Day Lead Time

Day 1
30/36 Arrivals 13 pm

If not OK send them home

Check by MD (15 mins) If OK: Check-in & admin

Blood test

Explain process steps

Dinner at 6 pm

Tea &

cookies at 9 pm

Day 2
Local anaesthesia (-20mins)

Surgery (40 mins)

Rest in room (2-3hrs)

Start eating & moving

Dinner at 6 pm

Tea & cookies at 9 pm

Day 3 Loosen stitches Walk, play, & eat with your buddies

Dinner at 6 pm

Tea & cookies at 9 pm

SHOULDICE HOSPITAL LIMITED Day 4: Remove stitches, walk, play, eat,and check out.
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Q1 -How successful is the Shouldice Hospital?

Unique Specialized method Shouldice Method developed to operate Harnea. Peace of Mind/ low risk/ low recurrence as more experienced ,efficient surgeon Highly productive surgeon:, performs 750 plus operations compared to others 50 per year. Friendly, social, homely and relaxing environment,more of a vacation rather than treatment Doctors and nurses are highly trained to help and counsel patients Method to book a surgery is convenient for patient living near and far(70%), saves time for patient. Nurse are trained to give counseling to patients and keep encouraging them to do things before and after operations. Cost of surgery is $2230 less compared to $5240 compared elsewhere. Highest compensation,benefits for doctors,staffs compared to other hospitals.
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Q2 - How do you account for its performance?

Shouldice Method of operation is being regarded as bread and butter operation or the simplest surgical method. Most experienced and efficient surgeon who perform 750 plus operations compared to 25 to 50 for other surgeons per year. Parents are allowed free accomodation to save extra expenses. Method to book a surgery is convenient for patients living nearby as well as for patients living far from the hospital, resulting in saving of time for patients.

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IIM Raipur

Q2 - How do you account for its performance?

Nurse are trained to give counseling to patients and keep encouraging them to do things before and after operations.
Opportunity for patients to interact with doctors to boost confidence and a sense to relax. Efficient use of doctors for operations and almost no waiting time for patients.

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Q2 - How do you account for its performance?

Shouldice
Focus on low risk cases Clear single value prop. Predictable process Strive for perfection

General Hospital
No focus, multiple goals Confusion of value prop. Unpredictable process Strive for threshold perf.

Eliminate waste
Manage patient flows Pull patients into process

Tolerate some excess

View patients as functional tasks Push patients through process

Q3 - What could go wrong here?

Ever rising demands of patients because of word of mouth advertising, may not be met in near future. Competitors may copy the unique technique Shouldice Method and misapply it or misinform their patients. Differences between older doctors and younger doctors over the changing certain successful procedures to improve further. If they go for advertising, it may generate too much demand to handle.
IIM Raipur 25-Mar-14 12

Q3 - What could go wrong here?

Concerns have been expressed about others using the Shouldice name while not performing the Shouldice procedures. Facility constraints as number of beds, doctors,etc.

Confusion on expansion plan.

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Q 4 - As Dr. Burns Shouldice, what actions, if any, would you take to expand the hospital's capacity?
Add another floor to the existing hospital facility Operating on Saturday Expand in US Patent the Shouldice method Proper succession planning of doctors Better not to diversify from its core competency (Hernia) Higher more nurses
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Q 5 - How would you implement the changes you propose?

1. Add in a new floor (45 beds)
Total Number of Rooms: 89 +45= 134 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 dinning room) Disruption during construction
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Q 5 - How would you implement the changes you propose? Cont ..

2. A Second Facility for Treating Hernia
Advantages New location close to the customers, say USA Improve its competitive position and increase its profits Operate in a less restrictive environment 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
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Q 5 - How would you implement the changes you propose? Cont ..

3. Schedule Saturday as an Operating Day ( Half Day) For surgeons (7am-12:30pm) For staff ( 5am-1:00pm)

Advantages

No investment is needed Can still maintain quality Would be more acceptable among hospital members as they Would be free after first half. 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
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