Shouldice Hospital case study and operations

Shouldice Hospital's Activity

Description of the Company and its Environment

Under the name of the doctor who invented a new type of hernia operation, the Shouldice Hospital was one the best in this domain. Its management was assured by the board of directors composed by Dr. Nicholas Obney (Chairman), Dr. Byrnes Shouldice (the son of Earle Shouldice, the discoverer) and his wife, Mrs. W. Urquhart (the sister of Mr. Byrnes) and her husband, Mrs. C. Martin and Mr. Jack Mackay. They kept control over the entire activity of the hospital which was focused only on treating external types of abdominal hernia. First time repairs, also called primaries, accounted for 82% of all operations performed in 1982, the rest of 18% involved patients suffering recurrences from previous reparations made elsewhere.

Because of the good results that were being achieved, the hospital had no reason to begin any advertising campaign, its fame was spread by former patients, by the means of "word of mouth." However, despite the results of utmost quality, the fees charged were low in comparison with other hospitals inside the similar medical sphere.

An Analysis of the Problems Concerning the Hospital

During his management activity, Dr. Shouldice was confronted with a set of problems. These referred to finding ways of increasing the hospital's capacity while at the same time maintaining control over the quality of the service delivered, the future role of government in the operations of the hospital, the use of the Shouldice name by potential competitors and the selection of the next chief surgeon.

Taking into consideration the first dilemma, the doctor was thinking of increasing the capacity either in Toronto or outside the boundaries of Canada. In addition to that, on one hand, having operations on Saturdays would have meant augmenting the capacity by 20%. On the other hand, an investment of around $2 million and permission from the provincial government could have been enough in order to add another floor of rooms in the hospital. These additional rooms could have expanded the number of beds by 50% and they could have scheduled the operating rooms more heavily.

Moving on, the second trouble consisted of the regulations adopted by the government of Canada. Dr. Shouldice was thinking of opening new hospitals in the United States where private hospital operations were more widespread. Also, another matter regarded the emergence into other medical domains like eye surgery, varicose veins or hemorrhoids.

Another important issue was referring to the competitors who wanted to copy the method and use it at their work places. The uproar was created by the erroneous operations which would have misinformed the patients. The bad results of the routine used by these doctors would have confused patients, making them believe that this routine led to the recurrence of the disorder. In order to prevent this unauthorized usage of the procedures, Dr. Shouldice was thinking about denying permission to the doctors wanting to pay visits to his hospital.

Finally, another problem troubling the doctor was the selection of someone to succeed Dr. Obney after his retirement. Despite Dr. Obney's few objections regarding the management, his guidance had been beneficial for the hospital.

Recommendations and their Implementation

The main problem is the fact that the hospital lacked in the means of covering the existent demand. Because of this aspect, the institution couldn't even begin a marketing program for fear that they might encounter a demand much too high in opposition to what they could offer. The initiative to have operations on Saturdays was badly received by four older doctors, and embraced by the younger ones. However, their taking of opposite sides was a reason of concern. It might have led to dissensions between the doctors.

The Shouldice hospital is very successful among the persons suffering of hernia problems. This is due to the proficiency of the doctors which work there, the high standards that they respect. The surgeons are employed only after a close interview with Dr. Obney. When selecting them, he takes into consideration the following aspects: they should have experience and a good education. They should develop a pace and a touch; they should be aware of the moments when speed is necessary, or when it is better to go slow. The most important issue is that they repair exactly as told and they ask for help whenever something unusual occurs. On account of their skills, the surgeons perform about 600 hernia operations per year, comparatively with others which complete 25 to 50. Other employees are also important for the service because they establish relationships with the patients, enabling them to communicate and, thus, overcome the situation easier.

The owners know what the patients need and, therefore, they struggle to offer them the best conditions. There is a relationship of friendship between the employees and the patients and even between the owners and patients. They visit them and even have discussions about the way they are treated within the facility.

The customers come because they find out about the exceptional results from former patients. Even though outside doctors do not recommend the facility, many times people have their problem diagnosed by personal physicians and then take the initiative to contact Shouldice. The major difference between Shouldice and its competitors consists of the fact that patients are advised to get off the operation table and take a walk to the post-operating room with the help of their surgeons. They can return to work within a week after the operation if they have a job involving light exercise (opposed to two weeks after an operation performed in a different facility) or within four weeks for a more strenuous job (compared to eight weeks when going to a different facility).