Shouldice Hospital Limited

1. How well is the Shouldice Hospital doing? From our point of view, Shouldice Hospital is very successful and is getting more popular. This can be concluded according to the following facts, which we took out of the “Shouldice Hospital Limited” case: -“Under Dr. Obney’s leadership, the volume of activity continued to increase, reaching a total of 6,850 operations in the 1982 calendar year. ” (p. 2) -“It was thought that most potential Shouldice patients learned about the hospital and its methods from past patients who had already experienced them.

”(p.3) -“During their stay, patients were encouraged to take advantage of the opportunity to explore the premises and make new friends. ”

(p. 5) -“Patients sometimes ask to stay an extra day […]. They share experiences with other patients, make friends easily, and have the run of the hospital”. (p. 5) -“When I interview prospective surgeons, I look for experience and a good education. I try to gain some insight into their domestic situation and personal interests and habits.

” (p. 6) -“Excellence is the enemy of good. ” (p. 6) -“Experience is most important.

The typical general surgeon may perform 25 to 50 hernia operations per year. Our perform 600 or more. ” (p. 7) -“Training in the Shouldice technique was important because the procedure could not be varied. It was accomplished through direct supervision by one or more of the senior surgeons. ” (p. 7) – “The steps are designed specially with a small rise to allow patients recently operated on to negotiate the stairs without undue discomfort. Every square foot of the hospital is carpeted to reduce the hospital feeling and the possibility of all.

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” (p. 8) -“We don’t have an organization chart. A chart tends to make people think they’re boxed into jobs. ” (p. 9) – “The hospital relied entirely on word-of-mouth advertising […]” (p. 10) Shouldice Hospital is focused on good working conditions. It tries to meet people’s needs and makes the hospital as good of a place to work as possible; not only for the patients, but also for the members of the hospital staff: For example surgeons, assistants and nurses were rotated every few days or weeks that they get as much experience as possible.

Furthermore each secretary is trained to do another’s work and in an emergency is able to switch to another function immediately. In spite of the fact that the pay scale for the staff is higher than the union scale for comparable jobs, there is also a high bonus pool and profit-sharing plan for all of the employees. The hospital also provides some free services for parents, who accompany their children and also provides free annual checkups for past patients. As a conclusion, Shouldice Hospital is doing well in capacity, service, quality, efficiency and performance.

What performance exactly means and how you account performance will be answered in the next question. 2. How do you account for its performance? To answer this question we looked at the literature of performance management and tried to relate the theoretical background with the information provided in the “Shouldice Hospital Limited” case material. In business literature several different approaches to performance exist. In organizational development, performance can be thought of as actual results vs. desired results. Any discrepancy, where actual is less than desired, could constitute the performance improvement zone.

Performance management and improvement can be thought of as a cycle: 1. Performance planning where goals and objectives are established. 2. Performance coaching where a manager intervenes to give feedback and adjust performance. 3. Performance appraisal where individual performance is formally documented and feedback delivered. A performance problem is any gap between desired results and actual results. Performance improvement is any effort targeted at closing the gap between actual results and desired results. Other organizational development definitions are slightly different.

The US Government’s Office of Personnel Management indicates that performance management consists of a system or process whereby: 1. Work is planned and expectations are set, 2. Performance of work is monitored, 3. Staff ability to perform is developed and enhanced, 4. Performance is rated or measured and the ratings summarized and 5. Top performance is rewarded. In Business performance management literature, performance is described as a set of processes that help businesses discover efficient use of their business units, financial, human and material resources.

The definition of performance in Operational performance management literature focuses on creating methodical and predictable ways to improve business results, or performance, across organizations. The answer to question 1 of our paper focuses on actual performance of the Shouldice hospital and the answers to questions 4, 5 concentrate on ways to improve hospital’s capacity, which covers the operational management approach to performance. Since the case material is short on data as far as desired results are concerned, we will take historical and comparative approach in order to account the performance of Shouldice Hospital.

Since the number of operations is considered by us as the most important measure of performance, from historical perspective we can see that performance on this measure has been increasing steadily since year 1982. “[…] the volume of activity continued to increase, reaching a total of 6,850 operations in the 1982 calendar year. ” The average number of operations per year reached 7750 (please see question 4 for reference) at the time of interview. Increased number of operations indicates the higher number of patients, which could also indicate a high customer satisfaction level.

Since the hospital in not using any marketing strategy to attract clients, and “relied entirely on word of mouth advertising” , we could presume that satisfaction reached desired results and increased the number of new patients. We could also look at the performance from financial perspective in terms of employees’ salaries “we try to maintain a pay scale higher than the union scale for comparable jobs in the area” . Ability to pay above average market salaries indicates reaching target revenues and non-existent or minimal gap between desired results and actual results for financial performance.

From the facts in Shouldice hospital case material, high involvement of experienced surgeons in coaching and giving feedback in order to maintain high quality of operations could be also observed. “Training in the Shouldice technique was important because the procedure could not be varied. It was accomplished through direct supervision by one or more of the senior surgeons. The rotation of teams and frequent consultation allowed for an ongoing opportunity to appraise performance and take corrective action. ” The above example of training program gives us insight on personnel management at Shouldice hospital.

Here we can refer to The US Government’s Office of Personnel Management approach to performance. Holistic approach to personnel performance management including planning, monitoring, development, performance evaluation and reward system (“bonuses to doctors were voted by the board of directors twice a year, depending on profit and performance” ) are integral parts of this approach and all of them, according to data from case material, exist (and are of great importance to Shouldice hospital’s management. We looked at different performance measures and approaches from comparative and historic perspective in order to answer this question.

With the data given in the case and the facts outlined in the answer to question 1, we can conclude that in all discussed fields, i. e. customer satisfaction, capacity, financial performance and personnel management Shouldice Hospital is performing with no gap between actual results and desired results. 3. Develop a process flow chart for Shouldice Hospital. In this answer, we will provide a process flow chart for patients, who have had their hernias repaired at Shouldice Hospital. A process flow chart deals with a schematic diagram for describing a process.

From our point of view, the real process starts when the patient arrives at Shouldice Hospital. That’s the reason why we do not have the previous steps (filling out questionnaires (1), patients getting their operation dates (2), information logged into the computer (3), patients sent their confirmation cards (4), patients contacted by phone (5)) in our process flow chart. Our process flow chart starts at 1:00-3:00 P. M. , when the patient arrives at Shouldice Hospital with 30 to 34 other patients. As you can see from the process flow chart, after four days, a patient is ready for discharge.

This multi-stage process flow chart also includes a lot of buffers , where the patient has to wait till the next step in the process flow chart can be processed. As you can see on the last slide of the process flow chart, there is only limited information available about the third and fourth day. Finally, patients can leave Shouldice Hospital after four days. 4. What is Shouldice Hospital’s capacity? First of all, to make more clear how we interpreted this question, we will give a definition of capacity: “Capacity means the number/throughput of units a facility can hold or produce in a period of time. ”

If we adjust this explanation to the Shouldice case, we assume that the capacity of the hospital is the maximum number of patients who can have an operation during one year. Referring to the case, the peak activity occurs in September when as many as 165 operations per week might be performed. Each year has 52 weeks, however according to the text: “For many of the same reasons, the hospital closed for two weeks late in December each year,” this means to a total of 50 work weeks each year.

Using this information we can assume that the weekly capacity would be 165 patients and the yearly capacity being 8,250 operations. Alternatively, using an average figure of 155 weekly operations performed, this will result in a yearly average capacity of 7,750 operations. Also the capacity could be the number of beds, “Initially, a 36-bed capacity was create in Thornhill, but after some years of planning, a large wing was added to the house to provide a total capacity of 89-beds. ” 5. As Dr. Shouldice, what actions, if any, would you take to expand the hospital’s capacity?

In order to create further opportunities to expand the hospital’s capacity, and secure future growth, Dr. Shouldice should expand the hospital’s facilities into the U. S. This notion supported by the case, which states, “Approximately 42% of all Shouldice patients came from the United States” (p. 3).

As of now, these patients are forced to pay “roughly $200 to $600” (p. 10) to travel to Toronto and patients from the U. S. must now have passports when travelling to Canada. Having a hospital in the U. S. could reduce some of the costs of travelling for these patients, decrease some of the anxiety of travelling to a foreign country, and make the facilities more accessible for potential patients.

Additionally, it would be in the best interest of the hospital to diversify its practice and pursue “opportunities such as eye surgery, varicose veins, or hemorrhoids” (p. 11). An expansion to the U. S. is an enormous undertaking and since opening a facility in the U. S. is akin to starting anew this is an opportune time for Shouldice Hospital to diversify their opportunities.

Based upon Exhibit 4 in the case study, “it is quite clear that others are trying to emulate us,” which means that Shouldice Hospital is the premier hernia care provider. Now that they have mastered the hernia care and procedures, they must now transfer that knowledge of patient care to other areas of medicine. A staggering 86% of the attendees of the 1983 Shouldice Hospital Annual Reunion responded that Shouldice Hospital most definitely cared for them as a person (Exhibit 3, p. 16). With numbers like these and given Shouldice’s record of accomplishments, it is time for Shouldice to move forward and expand their opportunities.

Furthermore, it would be in the best interest of the hospital to patent its world-renowned hernia procedure. Currently the procedure is available to all hospitals who, “may copy our technique and misapply it or misinform their patients about the use of it. This can result in failure, and we are concerned that the technique will be blamed for the recurrences. ” (p. 11). Occurrences such as these can denounce the Shouldice name and can hinder potential patients from looking into Shouldice’s procedures. Shouldice should also look into advertising its procedures in order to increase its capacity.

Presently, Shouldice is “afraid to send out this new brochure [they’ve] put together for fear it will generate too much demand” (p. 11). Advertising, in correlation with the expansion into the U. S. , would greatly increase the awareness of Shouldice because “the hospital relied entirely on word-of-mouth advertising” (p. 10). With the expansion into the U. S. Shouldice would be able to support the extra demand generated by an advertising campaign. The main types of advertising Shouldice should consider are direct mailings, magazine/newspaper ads, and infomercials.

The atmosphere at Shouldice in Toronto is definitely one of a kind. The patients, nurses, and surgeons all have a special bond rarely seen in a hospital, which greatly contributes to the success of Shouldice. In such a quaint working environment, it is important to consider the needs of everyone involved when contemplating facility expansions and work schedule changes. With this in mind, and seeing that there are only a small number of workers, all of whom do not agree on a work schedule change to add Saturdays, Shouldice should continue its present work schedule and not add Saturday operations.

Additionally, adding a floor to the current facility would greatly change the working dynamics of the hospital and the quaint environment in which the patients and staff thrive. Adding a new floor and Saturday operations may add revenue but it would take away from all that Shouldice stands for. As the case states, “‘I’d hate to see the practice split over the issue’” (p. 12). Finally, Shouldice should look into updating and digitalizing its computer systems. This will not only expedite the administrative process but would also lower patients’ waiting time and reduce the stress attributed to masses of paperwork.

Patients should be able to fill out all the necessary paperwork one time on a computer and then not be bothered until the procedure. In addition, digitalizing Shouldice’s system would make the brochure sent out to patients (Exhibit 1) a more fluid process. If the form was available on the Internet then there would be faster response times and fewer mistakes. 6. How would you implement changes you propose? Based upon the information provided in the case, it seems as though Dr. Shouldice already has a few places in the U. S. in mind for the hospital (p. 11).

We would encourage him to do further research to determine where the best geographic region is according to demand for hernia operations as well as the other opportunities mentioned (eye surgery, varicose veins, or hemorrhoids). Dr. Shouldice must also consider the cost of building a new facility and future revenues derived from greater capacity.

In order to protect the surgery that has made the hospital so famous, Dr. Shouldice would need to apply for patents through the provincial government. Moreover, it would be wise for Dr. Shouldice to apply for patents in the U.S. as well before he begins operations there. Taking the necessary steps to obtain a patent would secure Shouldice’s unique surgical procedure and their future success.

Although Shouldice currently handles all of their own operations, it is necessary for them to hire an advertising agency to launch a new campaign. An advertising agency has much more experience and knowledge about best practices and with the guidance of the administrative staff they could work together to achieve the desired outcome. Shouldice should consider advertising for their U. S.

facility as soon as an expansion plan is completed and for their Toronto facility as soon as the U. S. facility is open. This would promote awareness among U. S. patients prior to the opening of the facility and give the Toronto facility enough time to phase out some existing U. S. patients. A test period of six months should be implemented and if the advertising proves successful then further implementation and changes can be made. The first step Shouldice should take to implement a new computer system is to find a company who provides the services they are looking for.

Then the two sides would need to work together to develop computer software that fits the specific needs of Shouldice. Next, employee training would be required to familiarize all necessary parties with the new system. Then, a test period would be needed to ensure that the computer software was working properly and that all employees knew how it worked. Finally, the old system Shouldice currently uses would cease to exist and the new system would be fully implemented.