Shouldice HospitalShouldice Hospital“By the way they act, you would think our patients own this place. And while

they are here, they do!”

“By the way they act, you would think our patients own this place. And while

they are here, they do!”

Introduction• Started in 1945 by Dr. Earle Shouldice

• Only external Hernia operations (1st

time or repeat)

• Mission: No substitute for experience

• Goal: To make the Hernia surgery as just another work – simple and effective –

patients walk just after the surgery.

• Unique – 7600 operations/yr (others: 25-50); better paid doctors (15% more

than others in Ontario);

Market Served• Focus on a narrow segment of potential patients who have

hernia– they are predominantly male, – older in age, – essentially in good health – large market potential: 600,000 operations in US in 1979

Pricing:• High quality service at low price• Total costs=$1280 for 4 days stay + $650 for operation

(inguinal) + $300 for anesthesia + $600 for travel = $2830 • While others cost- $5240• Efficient and low cost

Service at ShouldiceWhat is the service concept of the

hospital?Unique operations strategy that is based on focusing on a single type of surgery with operational efficency, timing and minimal cost of surgery

– To the patient:• Peace of mind• A holiday experience• New friends – a fraternity• You are special but treatment is standard

– To the employee:• A direct professional contribution• A team and a place in the team

• Unique environment • Nurse ratio is 1:15-helps in

counseling • The matching of roommates based

on similar backgrounds • Patients and staff were served food

prepared in same kitchen.

Evidence of ServiceEvidence of ServicePhysical

Evidence

ProcessPeople

• Patients involving other health problems – duration of stay reduced

•Admission by appointment: scheduled service 20 min checkup

•Screening patients: easier to estimate the service time

•The avoidance of general anesthetics

• Patients to return to work in an average of 8 days after an operation

•Patients are active participants in the service delivery

process

•Very experienced doctors who are team oriented and

flexible

•No formal organization chart,

•This philosophy encourages job rotation which removes

monotony

•Employees enjoy a reasonable workload as well as an

above market average basic salary in addition to the

profit sharing system

Variety

ResponsivenessShouldice

World-class

General

Hospital

One general

facility

operations frontier

Low High

low

high

Market Focus

Service Management

• Standardisation: screening of patients• Participation: patients do much of the

work• Work environment: freed from usual

disagreeable work• Economics: sharing of expensive services• Best practice: interaction of surgeons• Motivation: all employees interact with the

customer Facilities for patients:

• Avoidance of hospital atmosphere

• Use of TVs, ‘phones

• The Schedule and Programme (keep moving!)

• Stairways

• Operating rooms in semi-circle

Service Quality Dimensions• Service quality

– Reliability: Patients trusted the un-hospital like method

– Tangibles: Recreation, friendliness among patients

– Assurance, Responsiveness & Empathy: Pre operation check ups and talks, receptionist to answer, 24 hours nurse to help, made to walk, talk and exercise, experienced surgeons in charge

• Product quality– 750 operations/year– 45 mins (1st time) and 90 mins (repeat)– Follows the government rules– Sufficient number of doctors/nurses to take care

of all patients and no much work load

Product Evaluation Continuum - Derived services

• Explicit services – Brochures, emails and pre operation talk by nurse/doctor

• Word of mouth/search properties – 10% outside the Ontario, 60% outside Toronto

know and come; ex patients inform others (alumni)

• Implicit services/Experience – The way patients are treated before/during and after

surgery (friendly chats, allowed to explore the premises, talk to other patients etc)

• Past experience/credence – Usually no 2nd

time surgery needed for the patients

operated in this hospital & annual check ups (warranty)

Zone of ToleranceAdequate Service – 45 to 90 minutes Hernia

Operation/Rapid Recovery

Zone of Tolerance

Desired Service - Friendly Doctors/Unique

Environment/Interactive Patients

Line of external interaction

Line of visibility

Line internal interaction

Gap Model

Communications Gap

All the support service and primary service coexist - what is promised is provided.

Delivery Gap

Delivering what is promised (45mins/90 minutes surgery)Can walk and exercise after surgery, no need for bed

pan.

Knowledge and Standards Gap

A questionnaire is sent to customers Pre check for 20 minutes Procedure is explained before

operation

Customer Gap

Customers expect good care, good quality operation with fast recovery.

Future expansion options• Add a floor (45 more beds)

– 29% increase, $930,000/year, i.e. 45% return on investment

• Add a Saturday shift– 148 to 177 patients/week = $627,000

/year• Develop another facility• Replicate Shouldice on new

specialty

Issues and Recommendation• To improve the hospital capacity without

affecting the service quality• Cost to furnish a operation theatre -

$30,000 (much lesser than other hospitals) – increase hospital rooms

• Expand in different geographic locations (50% improvement)

• Work on Saturday and Bring shift system to reduce the work pressure because of Saturday working. (20% improvement)

Operating Concept

• Shouldice achieves outstanding results as a low price and at a high profit because: – Everything done by the hospital is designed

to maximize the difference between perceived quality and the value of the service provided patients on one hand and

– the cost of providing the service on the other.

Thank YouThank YouJemeema and VandhanaJemeema and Vandhana