Shouldice Hospital, Ltd. Case

Starting as a small hospital, the Shouldice Hospital has had a rather long history since the end of the Second World War. And At the time of his death in 1965, the founder Dr. Shouldice’s longtime associate, Dr. Nicholas Obney was named surgeon-in-chief and chairman of the board of Shouldice Hospital Limited and under his leadership, the volume of activity continued to increase, reaching a total of 6,850 operations in the 1982 calendar year. And primaries represented approximately 82% of all hernias operations performed at Shouldice in 1982.
It has been very successful. And now it tries to meet people’s needs and make this as good a place to work as possible. It has been a comfortable place for patients to stay. During their stay, patients were encouraged to take advantage of the opportunity to explore the premises and make new friends. Also, it has been a nice place for doctors who teach each other, encourage a group effort, have regular working hours and own desirable salary. Furthermore, the facility and administration here is very humanized for both patients and staff.
As a result, patients are attracted to the hospital by its reasonable rates. Shouldice Hospital has specialized in hernia surgery (the Shouldice method) and is able to provide patients with low risk, low recurrence, and peace of mind. Shouldice achieves outstanding results as a low price and at high profit because everything done by the hospital is designed to maximize the difference between perceived quality and the value of the service provided to the patients on one hand and the cost of providing the service on the other. They do this by carefully screening patients.

Patients are active participants in the service delivery process as presented with the utensils to prep themselves for surgery. The avoidance of general anesthetics allows a wide range of involvement of patients. The staff is freed from much of the disagreeable workload due to part-time positions. The cost of housekeeping, laundry, and food is also minimized. The clinic structures hospital jobs that involve more counseling and positive interaction with the patients. Shouldice Hospital is different from other hospitals in that Patients do not feel that they are staying in a hospital.
It is Shouldice’s intentions to make its patients feel as if they are taking a vacation. When patients arrive to the clinic, typically they join up with 30 to 34 other patients and their friends and families in the waiting room. Patients with similar jobs, backgrounds, or interests are assigned to the same room to help the patients establish relationships and become more comfortable. The facility is also designed so that patients have to interact and walk around. There are no televisions are telephones in the patients’ rooms.
This gives the patients the opportunity to tour the facility, visit each other’s rooms, lounging in the Florida room, and making use of the light recreational facilities. Shouldice Hospital uses a focus strategy. The Hospital’s market focus is on a narrow segment of potential patients who have a hernia and the patients are predominantly male, older in age, and essentially in good health. The hospital has knowledge of the large target market, as there were 600,000 such operations in the United States in 1979. Shouldice uses an internal market strategy.
Shouldice’s doctors are dedicated to quality of the Shouldice method. The doctors are after several years at Shouldice must decide if this is something they want to do for the rest of their lives because eventually they will lose touch with other medical disciplines. Few elect to leave. Nurses at the facility are people oriented and work to assist patients as well as they can. The Staff is flexible and team oriented. Shouldice implements a sharing policy where the employees are paid a part of the profit in addition to their fixed salaries.
This sharing is done based on their contribution towards the success of the firm. This entices them to work hard and put in more efforts. From the management point of view, they have given their staff a lesser work load and weekends off. This makes it able for the staff to spend more time with their families and keeps them content with their jobs. After discussion, our group has four suggestions for Shouldice Hospital in terms of their problem. First, author mentions that there are some people realize that they don’t have hernias when they talk to doctor in hospital.
Therefore, hospital can increase its capacity by reduce this kind of error. Our group suggests that hospital should improve its questionnaire to make sure consumer can totally understand the questions. If there are some uncertainties in the questionnaire, nurses or doctors should call individual to make sure he/she has certain external types of abdominal hernias. Secondly, we think that Shouldice Hospital should not operate on Saturday. Even through Saturday operation can increase capacity by 20%, it is hard to control the operation quality. As O’Dell said” On the other hand, I’m oncerned about this talk of Saturday operations. We are already getting good utilization of this facility. And if we expand further, it will be very difficult to maintain the same kind of working relationships and attitudes. Already there are rumors floating around among the staff about it. And the staff is not pleased. ” Right now, Shouldice hospital is much more efficient and effective than other hospital. We believe they make excellent utilization of their resource. Therefore, Saturday operation may cause some overload on hospital’s capacity which will jeopardize the current process flow.
Thirdly, we believe that offers similar opportunities such as eye surgery is not a good idea. The reason is that the business bottleneck of Shouldice Hospital is the capacity of process rather than the demand in market. So, they should focus on how to improve the capacity to service more patients. Moreover, offering other surgery may harm their professional image in hernias area. Hence, our group suggests that they just stay on the hernias field and try to extent capacity. Fourth, we strongly suggest that Shouldice Hospital should build another hospital in the United States.
Nowadays, 42% of their patients are come from the United States. Round-trip fares for travel to Toronto from various major cities in the North American continent ranged from roughly $200 to $600, as compare that the total operation fee including hospital is just around $1000. So the travel cost becomes a big financial burden for patients. Hence, open a new hospital in American will dramatically reduce the travel cost for customers and expand business. There are two big issue concerns with the new hospital, where to open and how to operate.
Our group proposes that Shouldice Hospital should conduct a marketing research to find out where their current American patient come from and the transportation for some big city in United States to decide where to invest new hospital. About the operation of new hospital, quality control is the most important issue to maintain our brand reputation. They should relocate some experienced doctor from Toronto to American to train and direct the local doctor. Moreover, they should utilize the successful process flow into the new hospital and make some change by considering the difference culture and condition.
Finally, Shouldice Hospital should be marketing their service, while the main strategy of marketing is to clarify where is hospital and what kind of operation is truly theirs. Because there are many individuals or institution on the market want to attract customers by using our brand image. But, the quality of their service is not very good. This phenomenon will jeopardize our brand image and destroy our reputation. It is the responsibility of hospital to help people distinguish the fake one. Our group believes that some marketing activity will well-build hospital’s brand image and help them success in the long-term.