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Shouldice Hospital Case

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Case Overview Shouldice Hospital is speciality hospital devoted to repairing hernia. Its procedure and regime of treatment has led to great competitive positioning, but it is now falling victim to i ... ts own success because of piling backlog. Shouldice hospital specializes in treating external abdominal hernias. The doctors use the Shouldice technique developed by founder Dr. Earle Shouldice. This precise technique has resulted in early ambulation and higher success rates. It offers its patients more than just the treatment, i.e. the experience of warm and inviting ambience over traditionally cold, sterile, and frightening ambience in the typical hospital. It is located in a sprawling 130 acre estate outside of Toronto, Canada. The comprehensive patient experience includes - orientation, evening tea, patients socializing, and encouraging nurses and housekeepers. The services continue beyond patient’s stay with a free annual check-ups and lavish patient reunions. Patients actually get the superior results and remarkable environment for approximately half the cost of going elsewhere. Overall, the Shouldice experience is one that patients love and tell their friends and family about, making word-of-mouth the hospital's primary marketing channel. Shouldice is also very favourable place for employees to work. Shouldice employees are never fired, can participate in profit sharing, and earn higher wages than industry standards. Doctors make more than the average surgeon, receive monthly bonuses, and are able to maintain work life balance. These human resource practices have led to extremely low turnover, which supports the administration's goal of having very experienced staff that can properly and effectively execute the hospital's practices and procedures. Competitive advantage of cost leadership comes from: o Distinctive technique o Experienced staff o Overall patient stay experience o Thoughtful employee policies Problem Statement Demand for its services has become so much higher than its current capacity of 89 beds that it is in a constant state of operations backlog, which has grown to 1200 patients in the month of January (year of study). Thus, Shouldice needs to find a solution to its single most critical question as how to expand the hospital's capacity while simultaneously maintaining quality control of service delivery and employee satisfaction. Five main scenarios under consideration are: 1. Improving throughput by finetuning existing operations 2. Invest $2 MM in a new unit by adding a floor, which will increase bed capacity by 50% 3. Require its surgeons to perform Saturday surgeries 4. Combination of adding new floor and conducting surgeries on Saturday 5. Diversifying and expanding into new geography and services [Show More]

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