The Shouldice Hospital, Ontario, Canada is a pioneer in the field of treating patients suffering from external abdominal hernia. The speedy ambulation coupled with its reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth.
The issues that confront the hospital management are:
·Deciding on ways to meet the backlog of operations, by expanding the hospital’s capacity, while still maintaining control over the overall quality of service delivered.
·Handling piracy and bad mouthing due to piracy.
·Selection of the next chief surgeon after Dr.Obney.
After analyzing various plans of actions, it is proposed that the capacity of the hospital be increased by scheduling the operations on Saturdays also. At the same time a successor to Dr. Obney must also be selected. This solution seems like the most feasible in terms of cost and time and also leverages the existing strength of the hospital in providing quality services to the patients.
To implement the solution discussed above, first of all, awareness must be created among all the employees by means of workshops etc., about the urgent need for such a step to expand capacity. The selection of the new chief surgeon must be done by carefully scrutinizing all the surgeons in the hospital as well as interviewing new candidates for the same. The administrative processes in the hospital must be made computerized to improve their efficiency. Proper training for using them must also be imparted to the employees.
If it is not possible to increase capacity beyond a certain limit due to the above plan and the backlog list continues to expand, then opening an additional facility in some other geographical location, such as the US of A may be considered.
Situational Analysis and Problem Definition:
The Shouldice Hospital, Ontario, Canada is a pioneer in the field of treating patients suffering from external abdominal hernia. With its current capacity, it can treat 6850 patients annually.
The patients are treated using the operated upon using the Shouldice Method, and on an average each patient has to spend four days in the hospital recuperating. The USP of the Shouldice Hospital is its distinct surgical procedure. The speedy ambulation coupled with its reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth.
The hospital is having a successful run as a niche player catering to the demand for treatment of hernia patients. In spite of this, there is a huge backlog that the hospital needs to meet. Because of an increasing backlog, patients tend to go to other doctors for operations.
The issues that confront the hospital management can be primarily listed as follows:
·Deciding on ways to meet the backlog of operations, by expanding the hospital’s capacity, while still maintaining control over the overall quality of service delivered. The primary issue here is deciding on the manner in which the capacity should be increased without diluting the quality of service rendered.
·The issue of piracy and bad mouthing due to piracy are also important concerns for the hospital. Many clinics or doctors claim to use the Shouldice technique or the Canadian method and in the eventuality of the operation performed by them being unsuccessful it brings a bad name to the Shouldice Hospital.
·The next chief surgeon after Dr.Obney, who is due to retire soon, has to be selected. At the same time, retaining the existing talent pool of doctors and attracting newer doctors willing to learn the specialized hernia operations skill is also a primary issue.
Long Term and Short Term Objectives:
-To clear the backlog by increasing capacity of the hospital services.
-To select a successor for Dr. Obney, the chief surgeon who is to retire soon.
-To sustain quality in their services, ensuring good patient experience.
-To remain the leader in the medical field of hernia operations.
-To maintain the brand equity associated with the specialized technique of Shouldice Method for performing hernia operations.
-To ensure working towards goal of profitability while at the same time serving the society by passing on the proper knowledge of the Shouldice technique to other surgeons.
-Whatever step is taken, it must ensure that there is no dilution in the quality of the services rendered by the hospital.
-The action plan implemented must adhere to the government regulations regarding the profitability of hospitals.
-The solution implemented must be economically viable. Hence any step taken must be cost effective.
-There is an atmosphere of concern for the employees in the hospital. The decision with regard to the issues at hand must ensure that the employees are receptive in accepting that decision.
-The existing strengths of the hospital setup must be leveraged in any decision taken.
-Also because of the increasing wait lists of patients to be attended to, it must be ensured that the plans be implemented as swiftly as possible.
1.Capacity of the hospital could be expanded by scheduling operations on Saturdays also, leading to a 20% increase in existing capacity.
2.An additional floor of rooms could be added to the hospital, with an investment of $2 million and permission from the provincial government. This would expand the number of beds by 50% and result in scheduling the operation rooms more heavily.
3.Expansion into other geographical locations such as the United States could be undertaken. For having a quality level in the new facility equivalent to that as in the current Hospital facility at Canada, one option maybe to transfer 6 of the 12 specialized surgeons to the new facility. Also diversification into other related medical fields of surgery such as eye surgery, varicose veins, and hemorrhoids is possible.
4.Another alternative could be scheduling operations at other times during the day too, by utilizing the capacity of the operation theatres to the optimum level. This can be implemented by having doctors and other medical staff to work in shifts.
5.The successor to Dr. Obney as Chief Surgeon has to be selected. The selection of such a candidate should preferably be done among the existing doctors in the hospital. In case a specialized doctor from outside is appointed, proper induction to acquaint the existing surgeons must be carried out.
6.Currently the hospital’s services are not being marketed. Plans to adequately market them in order to create awareness of the genuine Shouldice method of surgery should be undertaken. This would also aid in protecting against privacy to an extent.
Evaluation of alternatives:
1.Increasing the capacity by scheduling Saturday operations is a swift and cost effective solution (See exhibit 2 and 3). No additional capital expenditures need to be incurred to carry out this plan. It does not violate any government regulations and at the same time also leverages the existing strength of the hospital in rendering high quality services to the patients. However, some employees seem to have some reservations about operations on Saturday.
2.This plan involves an additional capital expenditure of $ 2 million. While this would lead to an increase in capacity of the number of beds by 50%, but it would also require additional well qualified surgeons who will be able to carry on the quality tradition at the Shouldice Hospital. Also this solution would take some time to implement.
3.The plan of expanding the capacity by moving into another geographical segment such as the United States, involves extensive capital expenditure in setting up a new facility. Also by dividing half of the specialized staff into the two respective facilities, the quality levels may not remain same for the initial span of time. Since we are looking at the United States as an alternate the government regulations of Canada would not be applicable. This plan would be beneficial in meeting the demand in the US of A of the 42% American patients of the Shouldice Hospital. By diversifying into other medical fields of surgery, the low cost and high quality advantage, which the Shouldice Hospital currently enjoys, will be diluted. Currently the patients are made to become self sufficient soon after the operation.
4.By implementing the shift system, the existing strengths of the hospital will be leveraged. This is similar to the plan 1 in terms of the expenditure involved and the time frame being talked of. However, under the given case facts, the employees might resent this move of working in extra shifts during the day.
5.The selection of a successor to Dr. Obney is a step that must be taken soon, in conjunction with any of the above plans chosen.
6.Marketing the services of the hospital, though would lead to an increased awareness of the authenticity of the Shouldice method, while exposing the piracy in the method, but at the same time it will also lead to an increased number of patients wanting to come to the hospital. The backlog list would continue to increase.
After analyzing all the alternatives I would propose a combination of plans 1 and 5 to be implemented. The operations should be scheduled on Saturdays also (see Exhibit 1). At the same time a successor to Dr. Obney must also be selected. This solution seems like the most feasible in terms of cost (see Exhibit 2 and 3) and time and also leverages the existing strength of the hospital in providing quality services to the patients.
Plan of Action:
To implement the solution discussed above, first of all, awareness must be created among all the employees about the urgent need for such a step to expand capacity. Workshops for the same will help dispel any fears in the minds of the existing staff. The selection of the new chief surgeon must be done by carefully scrutinizing all the surgeons in the hospital as well as interviewing new candidates for the same. The administrative processes in the hospital must be made computerized to improve their efficiency. Proper training for using them must also be imparted to the employees.
If it is not possible to increase capacity beyond a certain limit due to the above plan and the backlog list continues to expand, then plan 3 may be considered. This would need some capital expenditure but at the same time will help us expand our capacity into another geographical location, i.e., the USA.
Information Adequacy Issues:
There is insufficient amount of information given in the case about the internal dynamics of the hospital vis a vis the issue of the successor to Dr. Obney. Also no information is forthcoming about the market status of other hospitals, that is whether they are open on Saturdays or not. This bit of information is likely to hasten our decision making process.