Shouldice Hospital Limited

Shouldice Hospital Limited

Summary/Abstract:

Shouldice is a private hospital founded by Dr. Earle Shouldice in Toronto in July 1945. The hospital started out as a six-room nursing home in downtown Toronto. As demand increased for hernia operations, he expanded the facilities to a capacity of 36-beds, which turned into a 89-bed facility after adding a large wing. Dr. Shouldice devised a method called the Shouldice method to increase the efficiency and the overall experience of the surgery and the post surgery recovery period. The hospital specializes on external hernia cases and will not treat internal hernia patients. The method proved to be a big success. In this case, we will analyze the process flow of the hospital, determine the bottlenecks and finally offer recommendations.

Background:

Dr. Earle Shouldice is a famous operator for his private method of hernia surgery. Unlike normal methods, his way allowed the patient to walk around right after the end of surgery, and move freely at the end of the day. When the number of patients he had increased, he decided to exploit this by founding his own hospital. He died in 1965, but his hospital continued to grow, and at the end of 1982, his hospital had 6850 operations per year.

Analysis:

Initially, the hospital sends out a medical questionnaire to figure out whether the patient has hernia. If the patient requires the operation, they were sent a confirmation card for the surgery. However, after initial examination at the hospital, some of the patients were found healthy, so they were also sent back. After the examination, an administrative personnel checks the insurance of the patient. Then, a nurse takes blood and urine samples from the patient, and sends the patient to his room. All this is done by 5PM, after which there is an information session regarding the operation. The patients are sent to bed at 9:30PM, and waken up at 5:30AM. The operation takes 1 hour (although the recurring ones take up to 90 minutes, but they're rare so are not included). The patient then stays in the hospital for 3 more days, but since the resource (nurse, doctor etc) requirements would be low (and are not stated in the case).

Shouldice was successful because of the following strategies: 1) Unique and well defined surgical procedure (cannot be varied), 2) Operation and recovery time lower than industry average, 3) Educated, experienced, and efficient surgeons (600 surgeries per year as opposed to 25-50), 4) Lower nurse to patient ratio (reduces costs), 5) Efficient, good quality, and uniform service (dependable), 6) High demand from reputation, 7) Higher pay than union standard for employees, 8) Being selective with patients ensures speed and better outcomes

The bottleneck of pre-operation is Insurance check, as shown in Exhibit 2. The second bottleneck is the number of surgeons available to perform surgery and keep patients flowing through the system. Once people have a place in the system, the next wait is for a surgeon to become available. Bottlenecks are both a burden and a blessing in this scenario. We build up a queue because people want the service but we are forced to find a way to alleviate the pressure on the bottlenecks.

Recommendations:

Simply adding capacity may upset the current balance that exists and lower the quality of the process. If the company would simply expand to add beds or create more hospitals, quality would eventually be lowered because you would